That sounds nasty - but at least you have an explanation, even if it does mean a new crank pulley (make sure you do that bolt up serrrioouuuuussssllly tight).
The engine damage sounds minimal too.
It does sound odd why one valve cap is looking in poor condition, could it be that one rocker was very loose? That would account for your tapping sounds and lack of power.
Considering not changing the pulley. Putting a new one on just gives it the opportunity to do the same thing again. I believe early versions of the engine had pulleys without flanges.
Had issues with the crankshaft bolt ... my windy gun is nearing the end of it's life and wouldn't touch it. My mates cordless Snap-on impact wrench wouldn't fit between the bolt and AC rad and the battery wouldn't charge anyway. So I made one of these ...
http://www.youtube.com/watch?v=s6lTzA0Em90&feature=relmfuWorks a treat!
Head's off now. Slight impression of valve on No4 piston, but it all
LOOKS OK ... revs were very low when the belt gave out.
If the tappet on the damaged lash cap was maladjusted that might well account for the symptoms I had before, but there was no tapping sound nor noticeable loss of power.
