XT600 rattling valve

[StewH]

Hi all,
been reading stuff here for a while, and plucked up the courage to register (since I don't travel the world yet)

anyway,
I have a 1986 XT600 (early kickstart only model) with around 40k on the clock.
Was very noisy from the top end so I decided to do the valves, although the bike was still running a treat and pulling like a good un.
Anyway, one of the exhaust valves is as loose as anything, can move it up and down a good 1/2 cm.
I did all the gaps, as best I could with that one, and put it all back together (my lets see what will happen philosophy)
Bike fired up from stone cold better than it ever has, and settled into a lovely tickover in no time. Top end is quieter, just ding ding ding ding from the one valve. Revved it to 4k beautifully, and seems to be running spot on, apart from the noise.

So, to get round to my question, why is it so loose? And what damage would it cause running it like that? Also, if anybody knows how I fix it, that would be a bonus.

Cheers,
Stew