I would definitely try the tranny flush, my S40 was slipping for the last 10,000 miles from 2-3 and I took it to the dealer and got a flush. It now shift better than it ever did. They charged me 250 for the flush but the S40 takes synthetic fluid not sure what yours takes.

The ticket sound is normal after a head job, it takes a while for the valve lash adjusters to pump up with oil. Drive it slowly and don't beat it, the tick will go away after a few miles.