Hi,
Good news is - I don't think you need a new engine.
As there are many moving parts that could create a knocking sound, it usually needs careful inspection to identify where it is from.
I will give a list of some of the causes and remedies. Yours will probably be one of them, but unless I was there - it could be any.
Loose exhaust component (causes rattles and thumps) - replace parts or joints.
Loose Engine mounts - Engine will move about a lot more than normal - Replacement of mounts.
Fraying Belts - causes continual ticking or slapping - Replace belts and check tension.
Timing is off - bad running, lack of power, pre ignition or knocking at low revs. Check timing belt - Replace, Tune engine.
Cracked valve - slight misfire worse at low revs - Replacement valves.
Clutch Problems - Broken spring or loose bolt - Check clutch plate - replace clutch plates.
Older engines - often accompanying smoke -
Broken Piston ring - continual ticking or occasional misfire - Replace Piston rings
Worn Piston bearings - Piston Slap - Replacement of all piston bearings.
Transmission Problems (only heard when in gear or with clutch out) - Broken gear teeth or worn bearings - Replacement of Transmission or rebuild.
Some of these remedies require engine removal and strip down, others are a simpler fix.
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