What side of the engine does the knock come from? I've owned two 1986 420SELs and both developed such a noise on the passenger side. Each time when I removed the valve cover, the cause was obvious - a bad cam lobe or two, along with the associated worn rocker. I replaced the cams and all rockers. My wife has a 1986 560SL and same thing there two weeks ago, and I installed a new cam and rockers. Not a huge job. Irritating, however. While in there, do the timing chain.