I think the issue here is going to be determining which of the two possible sensors it could be. There are two of them on the engine, both located about the middle of the block. The front Knock sensor is located at about the #3 cylinder and is pointing straight down. The rear Knock sensor is located about the #4 cylinder and it too is pointing straight down.
The problem here is going to be the rear knock sensor. It is in a tight spot due to the transmission and the rear exhaust manifold being in the way. Now, that said, when I pulled my engine and tranny out, I pulled them together and one of the things I looked at was how accessible would this sensor be with the engine and tranny in the car. I have to say it 'appeared' that it would be possible to pull it out, the problem is getting a wrench, your hand around the tranny in order to pull out the sensor. So if its the rear sensor then you could be in for a ride.
I know of only one way to isolate which sensor it is that is throwing the code either. Ive never seen the PCM throw a Knock Sensor code so I dont know what information it may be presenting that may give any clues if any at all.
If it is the front sensor, count your blessings and change it out. However, you are going to loose your coolant. Even if you drain the radiator, pull the lower radiator hose, you are still going to get coolant draining out from the block when you pull the front Knock sensor. It will also occur with the rear one. Probably about two quarts of coolant from each sensor is going to come out, so be ready for that. The sad part is if you change out the front one, then fill everything back up and find out its the rear sensor, you got to go through it all over again.
So my recommendation would be to just replace them both and be done with it. The problem with PCM trouble codes is that they can be symptomatic of another issue. In otherwords, the PCM may say its this, but that could be the result of something else that has failed that caused what the PCM says is the issue to not work or read properly.
The good news is that I know of nothing upstream from the Knock sensors that would cause this issue. So if the PCM is saying its a knock sensor, then likely it is. Start with pulling off the connectors and checking the connections and wiring and make sure that all of that is good.
One way to test the sensors is to hook up a scan tool (if you have one) and monitor Knock Retard (Engine off of course) and hit the block or somewhere close to the Knock sensors with a hammer and see if you get a KR reading. Unplug the sensors one at a time and hit the block and see if you get a reading. If you do, then the sensor that is still plugged in is probably still working. If both end up showing a reading then the only other thing I can think of is to replace them both.
