I was sitting at a red light and started hearing a noise, I pulled over and checked it out. Sounded like a loud cranking metal on metal noise. After further investigation I was surprised to hear a valve had dropped. What should I do? New engine? Rebuild?

 

Seems like more info would be needed to make a recommendation. At the very least, I would have the noise diagnosed before before deciding on a rebuild or new motor.

 

It would probably be good to know what model the car is also.

 

Who's investigation? Did you pull a valve cover/open the intake?

 

Before you assume catastrophical damage, take time to investigate.

Anecdote - one time I was convinced I was hearing crankshaft bearings, something I heard before on other engines and know how it sounds well, when the issue ended up belt tensioner pulley.