You need to visually inspect it. The worst case you have a hole in the block, and I don't think that's happen yet to my knowledge. Most of the time its an internal failure and you have to tear it down to see.
Ahh man, sorry to hear that..
If the dealer won't help you out, I would try to find a pullout motor and pay a reputable diesel shop to swap them. I'm thinking it's got to be cheaper than a new engine and install at the dealership.
Keep us updated.
I honestly wouldn't drive it.. if it is something that's fixing to let loose, finding an engine shop that could rebuild what you have might be cheaper than buying a entire new block.. but, I haven't priced either thankfully!
Welcome, hopefully your "knocking" issue is nothing catastrophic. That's proven to be costly out of warranty as @Brady mentioned.
When are you expecting to hear back from the dealer?