Starting work. First removing spark plug wires and letting go clutch cable from the brackets screwed to the valve cover.

Valve cover removed. I've found a bit of resistance as rubber guides for tightening nuts were glued to the bolts. It's probably a good idea to buy new rubber seals for those bolts, but you can change them anytime later.
So, gaskets were cooked as I expected and had to be replaced.

Pictures of the cam shaft. Cam is in pretty good condition, no wear.

I removed spark plugs so I wouldn't have compression resistance while turning the engine and to check them. On the picture plugs are in order from left to right 1-2-3-4. In my opinion they show good mixture and no engine problems.

I used rachet to spin the engine bu the cam shaft. I didn't use any manual to find the right piston position for each valve. I just looked at the cam to make sure rocker arm lays on the lowest part of the cam lobe.

I used my old gauge to measure the valve clearence. I welded a ball to the wisegrip and connected it with the gauge. The only requirement was to set the gauge in paralel with the valve to measure true clearance.
Only two intake valves were within the specs. All other were at least twice the max. clearance.

It is always a good idea to cover the opened engine when you're not working on it, say you went for a cup of coffe.

Setting new gaskets. I used a little bit of silicone gasket to make sure there will be no oil leak (I didn't have one before).

All parts back in-place and engine is working. No valve knocking anymore. I let it warm up and took a drive. No knocking on any RPMs.

That is all the tools I used...