Take a very long screw driver, or any kind of metal rod, now, go each side
of the engine, anywhere you can put one end of the rod... each time, put
your ear on the other end.

Valve "clapping" is not a knocking sound, it's more high pitch and mostly on
one side then center.

Knocking is mostly a rod or a crank sound, it's more deep and very easy to
hear, just put te same metal rod under or on top of the engine, center, listen.

Water in the tail pipe is normal at cold start, typical Vanagon stuff.

Ben