Well if it was my engine and i heard a knocking noise i would kill each cylinder one by one to determine if it coming from a specific cylinder like mabye a rod knock. What RPM does the noise become present? I see you say the noise gets louder but not faster. Now that i would have to hear. The smoking issue could be due to excessive blowby and/or piss poor crankcase ventilation. Has a compression check and leak down check been done yet?