Well I hate to throw another wrench into this but many folks, including me, would love to have any Chevy V8 Built in 1972 or earlier. These are the motors with the most HP per their cu in. Anti smog/pollution requirements started in 1973. Motors were "redesigned" and loss HP over night. If the 350 is actually a 1972, by looking at casting numbers and the serial code (application code) stamped on the head pad in front of and below passenger valve cover, that would be a nice motor to have.
A screw driver won't get it as you have discovered. Use a long wooden dowel or an extension handle from a paint roller or other household handle. Place one end all around the motor and the other end cupped to your ear. Touching your ear.
Hard to say about your motor. Seems like you said it does not knock right away, but after warm up. After parts expand possibly. Also the knock may be a separate issue than the smoke. Not sure. When did you notice each issue? Was motor OK for awhile, weeks, months, then not OK? You say you "worked on it some more" then it developed the knock and smoke? Can you clarify that?
