Take the spark plug out, and use a pencil to put it in the spark plug hole. Spin the stator rotor counter-clockwise, and stop when the pencil starts to go back down again, then find the highest point the pencil goes to. The valve clearances arent much on these bikes, it may be hard at first. If there is no wiggle, rotate the engine 180 degrees (piston goes back down, then back up). Im betting your knocking noise is a bad piston/bore, but check the easy stuff first.
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