If you think that is the area causing the knock
Run it again with something held sideways against the axle .
If it silences it then strip it and install some shim brass or other wise then run again .
If that solves the problem then you will need to
A forget about it
B. Bore it out and install a new bearing .
Also a helpfull hint
Buy your self a stethoscope. Remove the round piece and install a blunt long needle
(I have some)
This will help greatly in isolating leaks and strange noises .
Note The brass shim is only a temporary fix to confirm 0r deny problem
Cheers
Dennis