That is probably rod-end play, either at wrist pin, or crankshaft pin, and a certain amount of that is "right". Difficult to describe, but "some" is okay. That "click" is probably at TDC as the rod changes from the "up" to the "down" movement on the wrist pin. Glad you found what you did.

Wayne - whatever the mixture, or type of oil, I think a good idea is to optimize the adjustments without getting too lean, just as a general rule. Sounds like yours is really putting out the ponies.... glad to hear it!