that my friend is the sound of fear, you really should not be driving that anymore if it is really bad. what the problem is, is your timing chain has slack in it, this is due to ford putting in plastic adjusters and cassette in the front and rear timing chain. that noise your hearing is the chain smacking around and should be dealt with asap.
the only problem with this is the engine has to be pulled or the transmission has to be dropped to get to the rear cassette for the rear timing chain. this is generally the biggest part of the project. you can get the front with the engine inside of the vehicle and the kit isn't that expensive. you just have to buy the timing wrench which is about 160 to 200 bucks. this is all depending on your experience and how far you feel you can do the repair. to get a shop to do it your looking at about 1300 to 1500, now thats what i've seen quoted around here.
also, the shop told you not to worry about it??? i would not recommend going back there then. if the chain happens to slip or break, your looking into a new engine all together.
if you want to read up on the problem and diagnosis more, i would suggest this thread for you.
http://www.explorerforum.com/forums/showthread.php?t=163298&highlight=Timing+Chain
good luck man, sorry to have bad news for ya, but everyone from 97 to 2003 will eventually have this issue, again, thank you ford!!! i have the same problem but mine is not as bad sounding as you describe, they say once she starts sounding like a diesel quit running it....good luck guy.