I had a similar scenario. My motor also started out with a very light ticking sound that I thought was an exhaust leak.Then I had alot of water get into my oil real quick when the cam bolt that holds the timing chain in place loosened up (because I forgot to Loktite it) and walked its way through the timing cover and jammed in the water pump impellor. It made a hell of alot of noise and caused a 3" hole in the timing cover so all my antifreeze was pumped into the crankcase. The car was still running for about 1 block til I shut it down, but like I said it started with a tick then made alot of noise and smoke. The cam walked out of place causing cam lobes to crash into the lifters next to them. The result was my waterpump, timing cover, cam and lifters were all trash, but the rest of the motor was still in good shape.
Did you put Loktite on that bolt? If not, I'd start by popping the waterpump off since thats easy and it sounds like you may have to start to tear into the motor anyway.