Well, moving the flywheel toward the starter would DECREASE end play, so I'd guess that is not the source of your problem.
The knock, I'd guess, is from the flywheel not being tight. If it goes away under load, or when you engage the clutch, it's most likely the flywheel being loose. Make sure the bolts are torqued appropriately- too tight will just stretch them.
If you removed the flywheel make sure you got it back on the correct spline.
Then check out your starter and ring gear. You may need a new starter drive. It is possible to turn the ring gear around and use the other side if you take the time to use a small grinder and bevel all the teeth.