Heaters in those old trucks are pretty simple.. just a coil and an electric fan.
Hot engine coolant runs thru the coil all the time (unless you have a manual shutoff valve under the hood or a cable from the inside of the cab running to such a device) when you hit the switch, the electric fan forces air thru the coil and it heats it.
So if this "knob" you pulled is connected to a cable that goes to a supply cut off valve, then my guess is that your heater core has a leak. When you pushed the knob back in, you shut the supply off to the core.. which seems consistant with what you reported happening.
If the "knob" you pulled is actually the electric switch to the blower motor, then maybe it wasn't steam, but smoke?
From what you described, i'd guess either your heater core had a hole in it to start with, or opening the valve introduced some higher than 0 pressure that popped it.
