Unless I'm mistaken, the knock sensor only retards ignition timing, not cam timing. Knock is typically due to low grade fuel burning too early in the compression stroke causing detonation and piston knock. Cam timing changes optimize low end torque or high end horsepower.
Seems strange to have good compression, with a severely retarded cam. I might suggest pinning crank at TDC cyl #1, pull the cam plug and see how the timing marks line up. I would expect to see the bank 1 cam a few degrees off. I'd then rotate the crank 360 degrees while observing bank 1 cam and make sure it rotates.
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