possible severe engine damage - would appreciate diagnostic advice

[Fluellen]

Well, after 5 years of essentially trouble free operation, it looks like the car has its first major problem.

2001 S, 113 Kmi, 45 Kmi on new engine (replaced by PO).

Yesterday morning I tried to start the car. Garage temp was 47 deg F, and the car hadn't been started in five days.

Upon starting, there was immediate extremely loud clatter from the engine. I shut off the engine immediately. The clatter sounded pretty much terminal.

Some smoke wisps came from the exhaust, and there was a distinct burning smell. I verified that there was no fire and started it again. I figured, if it's already toast, another starting attempt wouldn't hurt much.

On the second start, the engine did not seem to want to catch. After 10 seconds it finally fired up. Loud clatter, not as bad sounding as before. Some smoke from the exhaust, but could have been moisture burning off. Idle was steady at 1100rpm (usual warm up).

Gave it some gas to around 1500rpm, clatter went away completely, car idled perfectly.

Drove the car out of the driveway, for one block. A lower-frequency clatter returned at > 2000 rpm, so I headed home and parked the car.

Summary:
Idles perfectly, seems to drive fine, but makes pretty awful clatter noise coming from the engine. No CEL. No other warning lights, all fluids seem fine. No leaks or obvious problems.

So... what could this be? Judging by the noises, I expect severe internal damage... but the fact that it idles and drives fine confuses me.

Any diagnostic advice?

I am planning on:
0. visual inspection of engine compartment and below
1. drain the oil through a cloth filter, inspect for debris
2. inspect spark plugs
3. refill with oil, do compression check

Any other suggestions? Thanks!