Ok so if you have lost spark under compression then it is possible it is moving on the crank so my next check would be to turn the motor upside down and see if you can get any movement on the crank and I'm assuming the flywheel would have to touch the coil to stop the spark and maybe that is the noise.For it to do this the crank has to probably move 20 thou and I would be surprised if a motor could run to get that much damage to the bearings
