Most likely it'll require a total teardown and rebuild. You might get lucky and be able to remove connecting rod bearing shims and get a few more miles out of it, but if the bearings are worn enough to hear a knock, other engine components are likely to be worn out as well. That might be worth a try, but your best approach might be to shop around for a decent used replacement engine. Lots of guy go for a later 235 with full pressure oiling. I've heard of the 216 being referred to as a "splash and clatter".
