Got 35,000 miles out the original engine before it threw a rod. The replacement engine had approx 6,000 miles when I got it.

The engine makes a tapping sound that gets louder but not faster at higher revs.

The oil sensor flashes (red light comes on) at idle speed only when I come to a stop. Above 2,000 rpm no light. I can start the bike and let it run until the fan comes on without the sensor coming on.

Prognosis? images/icons/confused.gif

btw YES it has oil in it. tried both 10-40w and 20-50

Could be a oil pump or a oil presure regulator... Hard to say... But since the oil light turns off when you rev it up I would have to say it is the oil pump. It sounds like you have changed the oil to see if that was it...

John