The O ring seals in the engine oil pick up system are old and tired, they are allowing air to be sucked into the oil and it in turn is being pumped up into the hydraulic lifters which tick and knock away. Drop the oil pan, replace all of the seals and gaskets in that system and reseal the engine oil pan. I do not remember the part number off the top of my head but Volvo has such an issue with this in all of their white engines that they have a kit out there that will do any white engine you have, a one size fits all kind of deal so you will have parts left over in the kit when done. You will need a tube of the liquid sealant and a short haired roller to apply it with. It is a fairly involved job for the average DIY guy on his back in the garage but it can be done. Typically this job pays in the area of 5-6 hours labor.

Mark