I will update and edit this first post as solutions to my problem and others materialize.
First a link to photos if you want to see more closely:
The issue of timing is discussed on a number of posts but with lengthy speculation. To truncate and solve my own issue with current p0016 error code I will attempt to place information I've found after hours of reading here and other posts.
I bought an 2007 1GRFE powered FJ with a "bad" engine for a candidate of a V8 Swap. When I got it home it had Christmas Tree lights including Oil Pressure warning light. This includes the Check Engine Light (CEL), VSC, etc. OBDII read came up with P0016 which is cam position sensor bank 1 out. This is passenger side or RH right hand side. But it started and ran well with lots of noise, no smoke or water coolant consumption.
Upon stethoscope inspection I narrowed noise to passenger side valve train noise or bank 1 RH side. This intrigued me and I set out to investigate engine condition and repair possibility before removal for V8. Maybe it could be sold off.
Drove 100 miles then pulled oil pan which is very easy.
Oil pressure light and valve train noise. This pan was heavily soiled with carbon and pick up screen was 90 percent clogged causing oil pressure variation. To describe contents after pan drop is coffee grounds in thin, dark gravy. The pickup tube screen for the oil pump is smaller than the particulate in the pan therefore creating a low oil flow situation. The engine now runs quite and strong with no smoke or noise at all. CEL and other accompanying lights remained on but no oil light.
before cleaning but after ATF treatment:
You'll notice how the oil plug (light colored metal) protrudes up into the threaded bung. It acts as a dam to prevent the heavy debris from draining during oil change. Pop it off and check if you get oil light. Avoid any adhesive material on threads during reinstall or bolts will not install all the way. Despite my efforts this still occurred during my reinstall. Solution is shorter or shortened bolts or clean out with a drill or pick.
Moving on to continue to solve p0016 sense motor seems sound.
Cam shaft position sensor (solid state closest to front of enging) Swapped sides.
Oil Control Valve (mechanical with electronic actuation just back of position senor) Replaced with new. Ebay $50
Nothing. No change in lights.
Discovered: Sludge to be seen on sensors. Scope in opening showed heavy sludging of cam gear. Oil control valve sludged but working and moved freely but replaced. This is easy to do as spark plug change. Air box removal necessary but not intake or any major. One 10 mm bolt with finesse an wrench.
Cam Position Sensor
Oil Control Valve
The above valve shows sludge at bottom of valve. There is a spring that could collect enough sludge to restrict movement of valve. There is an exit hole out the very bottom that drains out into galley. This valve moved freely despite sludge and 100% clogging of exit hole out the bottom. I do not see a filter on this part to clog as read else where.
Moving on to oil passage impaired maybe by sludge
Valve Cover removal and inspection.
Discovered heavy sludge and carbon build up. Blew out passages for oil control valve. Lined up timing marks and discovered crank timing mark off by a link or more due to skip or stretch. Stretching seems unlikely cause of such a discrepancy sense LH and RH timing marks are dead on (pictures not as illustrative as examination in person).
Skipped a tooth on timing gear at the crank. Picture below shows retarded timing off one full link about 7-10 degrees off 0 degrees or TDC. I believe from reading this should be at 0. Now VERIFIED with service manual all marks should line up with 0 on crank pulley. I believe a stretched chain would have a proportional effect along the timing banks. Essentially causing none of the banks to coincide with TDC. The RH and LH matching and crank being off I am hoping this is a tooth skip. Anyone having rebuilt before could answer but my research so far says these should all match. Pulling the front off and replacing the chain would fix as well but not necessarily reveal whether the culprit is stretch (no fix only replace) or skip tooth. If the front comes off the chain, gears, water pump, oil pump, guides would all get replaced as a prudent investment relative to the labor involved in any one fix.
(Trying soon): WORKED
I will attempt to move crank gear back into place by backing off tensioner and manually turning crank back one tooth and see if timing marks line up as they should or even within tolerance. Avoiding the lengthy front engine disassembly. This would be a great solution for those with a skipped tooth.
UPDATE: p0016 gone. No lights.
I ended up with chain position adjustment at the cam gears instead of at the crank because of incidental slippage during wrenching. I was able to inch worm the chain ahead from the slack passenger side using a wrench on adjuster nut. Pretty easy. The tool I made to lift chain off gear with one had was no helpful. Getting chain to drop off crank to rotate one tooth didn't happen for me. Drivers side bank two was a piece of cake with wrench on bank 1 adjuster nut levering some slack to inch worm one tooth ahead.
Once assembled, Idle was fast for awhile then normal. 15 min. idle warm up no errors or sounds. 15 min. Gorilla style test drive with no errors or lights till oil pressure light popped up again with sludge clog resulting from clean up efforts around top of head, oil galleys. Dropped pan, lots of coffee grounds. Changed oil / filter and idled again. Started. Stopped. Started again. No lights. All good. Update to come. See new sludge page 4.
Summation so far:
ATF and SeaFoam work to break down Sludge. Pan needs to come off to clear debris and oil pick up tube screen / filter. Oil pick up tube gets clogged and sends oil warning light. Drop pan immediately and clear and clean pan and pickup tube screen.
Sensors and stretch are too frequently blamed for timing issue. Cam Position Sensor if bad will cause a no start just like a crank position sensor. If not fully seated the Cam Position sensor will cause a no start. I read where a member swapped these sensors and got a no start. It is very easy to bolt the sensor down but only slightly misaligned and cause a no start.
Oil Control Valve is solenoid actuated and can get clogged and gummed up but it is easy enough to remove and inspect for free movement and ohm out. These seem very resilient and not prone to failure but an easy fix and more likely on lower mileage engines.
FJoel member has chimed in with a similar sounding engine noise here:
Issue: Noise at initial start up only
This issue has been determined to be the lock pins contained in the Cam Adjuster shown below with distinct double hash mark. This is LH side / drivers side:
Inside is spring loaded pin that locks in place, when working properly, at low oil pressure or engine off oil drain back. Upon starting the pin secures the adjuster until oil pressure builds up forcing the pin back against the spring and unlocking the adjuster and allowing oil pressure control valve to direct oil in a way that effects valve timing VVT.
Solved courtesy of FJoel: Tear into adjuster and inspect lock pin spring and free movement.
In my case lock pins are not likely the problem as I now have no noise at any time. My problem of no oil pressure and accompanying engine rattle before oil pressure fix does support "lock pin" issue at start up. It is a horrible, terminal sounding rattle. Again, mines gone now but I will say the noise I heard was likely the Adjusters running dry and I recall my sound was less at start up and got very much worse as it warmed. The opposite of Lock Pin issue. By rocking the crank back and forth you can determine if Lock Pin is in place by observation of lack or cam movement, essentially latency in cam rotation in relation to crank movement or "play". Mine are locked. But Valve Adjuster may be full of sludge and not allowing proper or full advance.
Below is an link to a video illustration that is closely related to Toyota type VVT
or hear check out minute 6 to lock pins.
Update: 12/3/15 I have been driving it on occasion and lately with a trailer behind. Running great. Less than a 1000 miles though.
Update: 4/16 Runs good. I hear chain noise that persists through warm up. Less than 2000 miles. Chain kit is $115 ebay. Considering the thing is not burning oil, runs strong, a chain replacement would not have been a waist.