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I just got done going through the same problem with 98 5.4 litre. Hydrolic timing chain tensioner was the problem. you have explained every single problem I went through with my truck. about a six houre job did it myself.
4.2 is a push rod engine, not OHC. no timing chain tensioner
I've never heard of a OBD code that tells you an engine is bad. I'd definitely get a second opinion on that.