If the turbo isn't out of steam and you're keeping the power down because of the stock block. Why are you even concerned about a 3.5in exhaust for more power? You have more power on tap, you're just not using it.
Get some denatured alcohol from a hardware store and throw it in. If the knock goes away or reduces, it's real knock. It could be noise, in which case the knock would still be there.
From what I've been reading, the 2.5 bottom swap is cheap and relatively easy. But, You are sacrificing the strength of the MZR DISI for a cheap bottom end. It'll get you back on the road, but I would use that purely as a crutch while the 2.3 gets rebuilt.