Thanks so much for the responses guys, much appreciated. A friend of mine who is an instructor at a local automotive tech college and myself drilled down an engine noise to a single combustion chamber and he feels it's piston slap which would need a complete rebuild, the noise is clearly coming from the bottom end. I was frankly never happy with the carb'd set up as I could never get it it to run correctly and the power is just lacking. I had MKI with an EFI'd, rebuilt 302, E303 cam, with aluminum heads and it would run circles around my 4.6 carb'd MKIII which is just a dog in comparison.
I have no interest in rebuilding this engine and would rather sell the car as is, or switch to an EFI or carb'd 347. I'd prefer EFI if possible, carb's are just a pain and I'm not interested in keeping it period correct as the car has been made to look more contemporary (completely murdered out with the only shiny piece being the LeMans cap

).
The car is complete and 100% road worthy. I've taken off the body over the winter to add support panels which were not installed by the original owner so, although it's a pain, I understand it would be necessary for any major modification.
I'm prepared to make all mechanical changes, i.e. fuel tank, trans, etc to make this happen. The only other option I can consider is getting the engine rebuilt and then adding a supercharger.