Well I FINALLY got to the bottom of what was going on with the Subaru. In short, it was a clogged secondary catalytic converter, because after reassembling the heads, setting valve lash and putting the engine back together I still had the same ratting noise and at this point the car would barely drive above 40 mph.
I ended up cutting out the secondary converter and test driving it to see if the problem had gone away and the subie drove like a brand new car. Ended up welding in a universal converter and now all is well.
If I would've tested back pressure I could've found this a lot easier, but I feel like the clogged converter has been the issue all along and it being plugged up is what burned out the exhaust valves.
Thanks for your help through all this!