914 1.7 Knocking Sound -- New Here, First Post, Horrible knocking coming from the motor Options

[UberElectricEagle]

Greetings. I am new to the Porsche world and I purchased a 1972 914 1.7 about a month ago. It's a pretty nice car over all, but I think the motor, or part of the motor, might be toast.

When I purchased it, it badly needed a muffler. The knocking noise was harder to notice and sounded more like an exhaust leak over the horrible sound of the lack of a working muffler. The car seemed to run decent even with the poor exhaust and the price was good so I bought it. I just wanted a decent car over all that I could drive around for fun on sunny days before the winter gets here. It came with stainless heat exchangers I installed and I installed a really nice dual muffler from Dave at Triad.

When I fired it up with the new muffler, I really noticed the knocking when I drove it since the all the exhaust leaks were now sealed up and I wasn't wearing ear plugs. At idle it's not too bad, but once I get going, the knocking is very noticeable. It's odd too, because it's not real consistent under power in motion.
To me it sounds like the noise is coming from the #1 cylinder. I think the cylinder is providing no power, because when I take the wire off the cap, there is really no change in performance. (I put a video link of the horrible sound below.)

Any advice on where to go from here would be great. My gut feeling is telling me the motor is going to have to come out. If I'm going to do all that, I might as well put a 2.0 liter in or ????? I'd even settle for just a solid running motor with some minor upgrades to make it a little quicker. Any advice on what route to take on a good used motor would be great. I guess A motor that runs on 4 cylinders would be an upgrade. Thanks for your help, a mildly depressed Sam

http://www.youtube.com/watch?v=a5JhEd7SUH4...re=channel_page