SOLVED IT!
Short version: It was an incorrectly installed harmonic balancer the whole time, causing the engine noise/knocking! The old balancer didn’t even look like it failed, but what I didn’t realize was someone had not seated it onto the crank fully. They ran it onto the crank with a bolt and the bolt bottoms out in the crank before the harmonic balancer is fully seated (looks correct and torques to 80 lb ft but is not correctly installed).
If you have knocking, check that your balancer is fully seated onto the crank using an install tool. You can rent one like I did. Basically free.
The details: I replaced the balancer when I removed the timing cover to inspect the timing chain set, even though the balancer didn’t look bad. I figured why not.
I installed the new harmonic balancer with a proper install tool. At this time I also added ATF mixed with fresh engine oil to the engine. Upon cranking the Jeep the motor was quiet! I thought the ATF had freed up a lifter. I drained the oil mix, installed a new filter, and fresh oil. The Jeep was still quiet.
Later I noticed something. The crank bolt washer (fat washer) was loose enough to spin by hand, even though the crank bolt was torqued to 80 lb ft. The bolt was bottomed out in the crank.
I decided instead of adding washers I would slide the balancer out slightly then re-torque it allowing the bolt to seat the balancer. So I did that (mistake)
Next day I replaced the thermostat and then started up the vehicle. It clattered on startup and was knocking/loud again to my surprise. I thought damn maybe a lifter got stuck again. Then it dawned on me. Something HAD changed. I messed with that harmonic balancer.
Today I removed the balancer to measure it compared to the old one, thinking the snout must be different in length somehow. It was exactly the same as the old one. Hmmm. So I asked myself when was this engine running quietly? It was when I installed the new balancer with the install tool and FULLY seated it against the crank. So I reinstalled the new balancer with the install tool and fully seated it. I used two hardened washers as spacers on the crank bolt/washer so the bolt wouldn’t bottom out too soon. Cranked her up and she’s quiet again!
Problem solved and some lessons learned. Someone during previous ownership had the balancer installed incorrectly and it was causing the knocking noise the whole time.
Hoping this will help someone else one day