Time for new engine?

No. In other posts within this thread, you report adequate power, very good fuel economy and the compression results are not bad. The ticking engine noise is probably due to excessive valve clearance. If some of the valves open slightly less than they should, then engine power will be restricted.

If the noise really bothers you, you could try using thicker viscosity engine oil (10W-40 or 20W-50); however that may negatively impact fuel economy and in very cold winter weather the engine may be harder to start.

Regarding the engine speed surging, I suggest you clean the throttle body interior and throttle plate if that had not recently been done.

I further suggest you turn the radio volume a bit louder and ignore the valvetrain noise.

 

Have you tried to use a contact (mechanic's) stethoscope to narrow down if the noise is louder on the valve cover (valvetrain) or towards the timing cover (timing chain/ VVT)?

A leakdown test gives you a great indication of overall engine "health", but really won't give you any direction towards locating the source of your noise.


Posted via the PriusChat mobile app.

 

Pictures of valve area please. Let’s see how well it’s been taken care of to me that will tell life left. And no that’s too much chain slack. Probably tensioners are worn out. That will make a lot of noise. You can start it with the cover off but don’t let it run long see if there’s bad noise coming from chain area.

 

Sorry forgot to tell you to put it in inspection mode where the engine will idle endlessly.
Go on YouTube and search
Prius inspection
It will show you the chicken dance to put it in that mode. When done just shut the car off it will disable that test mode.