The OP has never mentioned if this D2 is dead in the water or if it runs & drives, but ticks.

If it's running and driving without loosing coolant or overheating, change the oil, and the thermostat and see how the ticking does after that. If you're unable to drive it, due to overheating, coolant loss, and the ticking then yep you need to work on the engine.

 

Honestly unless you are doing all your own repairs/maint. You have no business owning a 12 year old 4x4 especially a Land Rover. A Honda Civic is probably a better bet. At very least a Toyota truck of some kind. Any car or truck has the potential to be a money pit at that age. At least the seller was honest about the noise.

 

The tapping/ticking noise may not be the dreaded slipped cylinder. Mine, an '04 has had an intermittent ticking sound for about a year now. Based on conversation on this board and a local indie mech who works on rovers, mine seems to be under the valve cover. I ran a quart of motor medic thru at two different oil changes, and put a quart of rislone additive in the oil( rotella 15-40)and the WIX 51459 large oil filter. My tick has has lessened by 40%. In a long discussion here, I learned that the oil passages can become clogged. Look at this thread:
https://landroverforums.com/forum/di...tuation-79876/