Welcome to the site, Roman. When you get the opportunity, post some pictures of that wagon!
My experience with the symptoms you are describing is usually main or rod bearing wear. I doubt that it is a faulty oil pump, because the oil light goes off with RPM; more likely it is excessive bearing clearance. Have you listened under the engine, as well as on top? You might try listening while you are on your hands and knees, with your head under the car and close to the oil pan, to see if the noise is louder down there. If it is, I think you have worn bearings in the engine. If you put an oil pressure gauge on the engine, that will tell us a lot.
As Kevin mentioned, if the nylon teeth come off the top timing gear, they can also clog up the inlet to the oil pump, and this could lead to your oil light coming on at idle.
If the noise does turn out to be a valvetrain noise, pulling the valve covers ought to let you figure it out. That engine will have hydraulic lifters and non-adjustable rocker arms, so you can turn the engine to the firing stroke on each cylinder and check for looseness or play in the rockers of that cylinder. If you find one that is loose, that is likely the source of the problem.
Good luck on the diagnosis!
