Hello:
Sorry, but I do not have any direct experience with engine knock on a Corolla, but I do want to say that if its a 2001 and already has engine knock on it, to get estimates on an engine repair/rebuild, and if its quite expensive, to just get rid of the car. For something like that, I know its going to be very pricey.
Another thing, it is possible that this car was in an accident before you bought it. You can go to
www.carfax.com and enter your VIN number and it will tell you the complete history of the car. I don't know where you are located, but in the U.S., (Illinois anyway) if you bought a car, and the seller didn't tell you it was in an accident/rebuild, then the seller is liable.
This type of work is quite treacherous, however. If you do not want to do this, I think it will be in your best interest to just get rid of the car and cut your losses.
I bought a Toyota, and will continue to buy Toyotas because of their record for reliability. If taken care of properly, they will last well over 100,000 miles. My sister's Corolla has over 300,000 miles on it and it still drives like its brand new. That's why I bought mine. Sorry to say this, but any american car won't last that long.
I hope this advice helps.
Erick