Valve tap?

The Prius motor uses solid lifters so has fairly loud valve noise anyway kinda like a loud sewing machine.
And yours is starting to eat alot of oil too.

I would move up to a synthetic 40 weight like 5-40 right now now. It wll help the oil loss. and the noise.

Also be aware when the hybrid battery starts to not provide rated power the main power source falls on the motor which is very hard on the motor as you have to push the car much harder. The main power for this car is the hybrid battery when that starts to go by by the car becomes a slug.
It happens so slowly over the years you don't even notice you just push the gas pedal harder to get to the speed and acceleration your used too. The result is poor mpgs. And a whupped motor.

So i would start looking very closely at the hybrid battery.

Repairing loud lifter noise requires replacing shims in the valve train to make up for cam and lifter wear. Big job cams have to come out. better to just replace the motor with a used motor. At your mileage your getting there..

 

Toyota USA says every 5K miles for second gen, IIRC. Then with 3rd gen, they lost their minds, doubled it...

Here's some Repair Manual info on the valve clearance check:

 

This is easily actionable.

Get a mechanic's stethoscope and (literally) poke around. They're cheap and you can learn a lot about this situation with relatively little time, effort & money involved.

 

Not only that, there are no shims in this engine. Instead of using solid lifters with a variety of replaceable shims, they make the solid lifters themselves in 35 different sizes, for intake and for exhaust, and used with no shim.

To do a valve adjustment, you: measure all 16 current valve clearances, and write down the correction needed for each one to bring it into spec. Then disassemble the valve train, micrometer all 16 lifters to find out what sizes they are, and add or subtract the correction to find out what size each one should be. Order the 16 lifters you need (or, if you're lucky, some of the sizes you need will be among the ones you already have). Wait for your order to come in, including that one size that probably wasn't in any US warehouse and comes in two months from Japan. Then reassemble the engine and you're back in business.

I had a thread about when my Gen 1's 1NZ engine started making such noises. I never found a smoking gun, though. There did appear to be visible wear on some cam lobes.

 

5w-40 is an odd weight. One of the more popular ones you might find is Shell Rotella T6.

Don't use it in your Prius.

It's formulated for diesel engines, and it has a significant amount of extra zinc in it. It's a really good product and it works well, but the zinc additive, when burnt in an old engine known to burn oil, will poison the catalytic converter and clog it. Obviously not an issue on diesel vehicles as they do not include catalytic converters, but it becomes an issue for "off-label" usage like this.

Castrol and Mobil both make 5W-40s formulated for gasoline engines. No zinc problem. Maybe not as easy to find but they are out there and they're more appropriate for your plans.

Good luck!

 

While I never found a smoking gun for the noise in my Gen 1, I drove it years longer, 40,000-ish miles, with no resulting problem. The noise did not determine how long I could keep the car. An eastbound Dodge Dakota did that.