plastic in pan knock another ??

After removing the front cover I discovered that the timing set had already been replaced with a steel set. I did discover that the thrust button was totally chewed up. Exactly what is it's purpose? and could it somehow be the cause of the knock or am I looking at rod bearing replacement? Thanks again.

The button keeps the cam from moving forward during rotation. It rests on the back of the front cover and stops any movement. This could be the cause of your knocking rather than a rod bearing.