V6 SOHC - Well known for timing component failures, could possibly be your problem. If by chance he took the cam out, specials are needed to time it. If it's not timed correctly, it could run, but with a loss of power.
That's probably why you get that slight rattle. That oil is liquid garbage.
Blackstone labs oil analysis proves it over and over.
Put something like Castrol or Mobil 1 if you choose synthetic.
I had a start up rattle for 50,000 miles, never changed and was quiet while running. The truck...
This is a common issue, usually fixed by cleaning all the speed sensors. You have one on each front hub and one on the top of the rear diff. They tend to accumulate metallic dust (their magnetic) which interfers with the signal at slower wheel speeds, giving a false activation of the ABS.
The transfer case is switched with an electric motor. Once you select 4 low, the transfer case will remain in 4 low until another signal to return to 2 high is provided.
So yes, it will remain in 4 low until you select 2 high with the switch.
How can you open up an oil thread in an automotive forum and not expect to get a huge range of opinions of what's best? Seriously....
Castrol GTX 10W-30, I've got upwards of a million miles logged with that crap with various engines with absolutely no oil leaks or mechanical engine problems...
Most likely a oil ring has failed. If it were the head, the point of failure would be the valve guide seal and that only smokes upon start up and clears once running.
Your only option is to rebuild it.