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You need to find where the noise is coming from. On the top could be lifters, valves or low octane gas causing a ping. On the bottom could only one thing. Rod knock. The bearings for the pistons and crankshaft are worn.
The knock sensor is on the passenger side of the engine, down below the exhaust manifold, and threads into the water jacket. Use the proper sized socket to remove. You may lose some coolant, so either drain some coolant first, or be quick getting the new one into the block. Not too hard to replace. It is about the size of a silver dollar and silver in color.
I had a chevy 2002 avalanche,2004 chevy tahoe both after 20,000 miles developed a mild lifter or slight bearing knock.When I confronted chevy with this problem they stated this was normal for the 5.3 liter v8.Being a mechanic myself didnt think this sounded right.My friend has a 2003 gmc yukon and motor sounded same way.I no longer own my chevy,But my friend still has yukon with 150,000 plus miles and yet it still knocks when you start it.this is just a problem with chevys and other gm products.
sound like an internal engine problem. either one or more of the pistons has "piston slap" and that knocking will diminish as the engine warms up or possibly a rod bearing is worn out. have a tech do a manual oil pressure test to make sure the oil pump and main bearings are ok. piston slap or knock that decreases when the engine warms up is not that serious, but a rod bearing knock or possible oil pump failure should be taken care of asap.
Are you sure that your timing is set right. This will make it sound like this, also if the valves are not adjusted right will make alot of noise. The person who rebuilt the motor should stand behind his/her work!!!???