I think you are on the right track. Since you are into the glow plugs, it might be best to pull them and do a glow check in order to rule them out.
Usually the valves needing adjustment shows up as a slightly rough idle even when warm. Also, there is a lack of power. (At least that is what I saw on mine.) It is easy enough to check clearances and see what you have. You will need 27mm deep socket and 1/2" dr. ratchet to turn the crankshaft bolt. If you do it while the glow plugs are out, it should be pretty easy to turn. Also, you need (2) 14mm wrenches (one of them thin) and .35 exhaust and .10 intake feeler guage blades.
The knock is more than likely what we refer to as nailing. It is usually due to an injector with less than optimum spray or pressure. However, misadjusted valves can show up as the same thing. Try the glow plugs, then check the valves before venturing into injectors.
