Re: cant catch a break!!
Well if the seller made some sort of warranty, I'd show up at his house and "persuade" him again...but if its some joe off craigslist, not much you can do.
If you have access to someone with an advanced scanner (not just a code reader) you can monitor knock and see if its actually "knock" or a "tick" from the valvetrain or elsewhere. It almost sounds like the cold-start piston slap that the early 5.3's were known for, but that usually went away after a few minutes.
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'66 Short Step / SD Tuned / Big Cam LQ4 / Backhalfed /Built 4l80e / #REBUILDEVERYTHING 
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