Could be a few things Pistons might have gone making it knock and smell. But I would say it's been running rich maybe needed mapping or a map sorted if it's been modded. But classic shapes have been known to suffer leaky injector seals that would let fuel into the Oil making it smell. is the knocking really bad, if you could get a video of the sound put on youtube and share it here so we can hear it might be able to narrow it down better. Just hope it's not bigend failure :( But could be a bit of piston slap