It doesn't sound too bad to me either but I guess the sound reproduction may not be that accurate.
I have found there are two main sources for mechanical noise in the M and B Series engines.
Firstly, the cam gear..specifically wear on the teeth of the crank pinion, cams, intermediate gear and magneto drive gear. The crank pinion and the cams being the main culprits(assuming the mesh of the mag drive gear has been set correctly).
As the cams lift, the valve the spring is being compressed, but just as the peak of the cam lobe is passed the valve spring is then driving the cam to the extent that it will suddenly 'take up' any excessive tooth clearance.
This produces a noticable 'click' which can be heard even when turning the engine slowly by hand with the timing cover removed.
This can be improved if a number of alternative crank and cam pinions are available by selecting them for 'best clearance'
Fitting new components is also an option but can be problematic as gear sets were originally 'selectively' assembled to match tolerances. I have fitted new components and found that the cam gears were then too tight...carefully selecting a used crank pinion resolved the problem in that case.
The Magdyno units can also be very noisy..a solution here is more difficult as alternative parts are not readily available and both units have to be stripped and carefully reassembled to the correct tolerances (also not readily available).
Although a mechanically quiet engine is desirable and achievable they will run fine with a little wear and noise...Ian
email (option): ian@wright52.plus.com
Oh bugger, something else to worry about! Ian, do you actually measure the clearances between the teeth or is it "waggle and see"? If you have a figure, I could use it when I start sorting through the bucket of cams I have when I do the B31 sometime in the distant future. 
Cheers
Pete
email (option): petercomley@web.de
No figures Peter..I just do it by feel and then test it by turning the engine over slowly by hand at the build up stage with the valve gear fitted..you can actually hear and see the cam jump forward as the peak is passed if there is excessive clearance.
Minimal, but perceptible clearance with no tight spots is what I look for..The crankshaft must also be running within tolerance (max..002" runout on the mainshafts) to avoid affecting the gear tooth clearances as the crank rotates....Ian
email (option): ian@wright52.plus.com
Thought so...witchcraft!!
Pete
email (option): petercomley@web.de
they say if you cant turn the radio up anymore to drown out the engine noise then the engine needs repairing ( who are they)
hi jeff,are you right with your tappet settings?.08?mm? would equate to 0.0032''(inches)or thousandths,or do you mean 0.008''(inches)thousandths ? the way you have writen it is confusing me.0.08''would be 80 thousandths about ten times what it should be and would definately rattle cheers rick
ps from the book 1937-1945 inlet0.004'' exhaust0.006'' hope this helps
email (option): richardholt@rocketmail.com
I run mine on a tight .008" inlet and slack .008" exhaust and have done for years. The .004" and .006" figures quoted relate to the early '8 headbolt' M20, though quite why they differ from later types by so much is a mystery...Ian
email (option): ian@wright52.plus.com
Hi Matt...Irritatingly I have never really got to the bottom of tappet clearances as a subject and at first sight there seem to be numerous anomalies.
For example, if you take a number of typical OHV engine units with similar construction methods and materials there is a wide variation in tappet clearances. For instance, a BSA B33 is .003" inlet and exhaust, a Royal Enfield is .000" inlet and exhaust while others have different figures and also a variation between inlet and exhaust settings.
Altering the tappet clearances in an M20 engine will affect valve timing but my impression was it is more about expansion rates in a standard engine.
If that is the case there is nothing to choose between the early and late M20 engines that would seem to justify a doubling of the tappet clearances from the first version to the second.
Taking 3 or 4 typical WD sidevalves from different manufacturers which employ virtually identical construction methods and perform in a very similar fashion you will find they all have different tappet clearances.
I suspect cam design may have a part to play as well but am unsure of how. To date I have not found any literature that explains this possible link and makes comparisons betweeen different engines.
Ed Abbott may be able to shed some light on the subject if he sees this posting as his knowledge of this subject is probably more advanced than mine.
So far I haven't been able to work it out! ...Ian
email (option): ian@wright52.plus.com