4.0 HO 6cyl 96 Cherokee Classic--loud, arrhythmic, knocking in park, under power sounds fine, also, a single knock occurs when I decelerate and go from park to drive, then fine under power. Pulled engine pan, checked alignment, angles, offsets, clearance, etc. Nothing obvious. Please help. Desperate in Duluth

http://forums.nicoclub.com/96-pathy-knock-sensor-location-t483742.html

Is it metalling sound ? if that's the case then don't drive it .. you might be having issues with connecting rod or the bearings in the both cases engine will seize. Consult a auto technician, but you wont have engine light on due to this.

If it is knocking due to misfire (which is mostly the case as the engine light is also on) .... than find which cylinder have the issue then clean or replace the spark plug. If you can get a scanner to read the car computer it will solve the issue in a blink. Otherwise start the engine ... open the hood .pull out spark plug connector one by one and notice the change in sound... the one that is bad will have no effect on the sound.

Have you checked the oil pressure.

Remove the engine drive belt and run to eliminate any accessories causing noise.

Check valve rockers, could have a bad hydraulic cam follower that is not pumping up.

Could be more serious, why did the head gasket fail, might be an associated problem with that if engine overheated ect.

First I was going to say the valves were damaged from the heat or lack of oil, but that would not make sense if the steering wheel is turned.
The power steering is about the only thing affected by the steering wheel.
I would take a piece of heater hose and use it as a stethoscope to listen around the pulleys for the noise with someone turning the wheel.

I don't see the knock sensor on the 4.0L engine. --- COMPONENT LOCATIONS Fig. 1: Electronic engine control component locations - 2.5L engine shown
Fig. 2: Overhead view of the (A) automatic idle speed motor, (B) MAP sensor, (C) crankshaft position sensor wiring harness, (D) air temperature sensor, and (E) throttle position sensor - 1992 Cherokee with the 4.0L engine shown
Fig. 3: Electronic engine control component locations - 4.0L engine shown
Fig. 4: Electronic engine control component locations - 5.2L and 5.9L engines (Part 1 of 2)
Fig. 5: Electronic engine control component locations - 5.2L and 5.9L engines (Part 2 of 2)

that usaly means rod or main bearing failure, Soon it will let itself out of the motor if unattended

check your motor mounts. sounds as if one is broken or worn out, also, check the tranny mount.

Look under exhaust manifold on drivers side, closer to rear of engine . mounted on engine block.

does it have a knock senor? fuel cut due to knocking may occur

It could be a drive shaft. You may need to go under the vehicle and see if there's any play at the joints that are on the ends of the shaft.