Did you rev it up with motor flush in it? That alone can kill the bearings, depending on flush viscosity (most of them are kerosene...)...That's why I am NOT a fan of flushing, everyone wants a quick fix, but dislodging gunk inside a neglected engine nearly always kills it by plugging something up, and the viscosity drop caused by the solvents can be fatal to the bearings...Kreen is engineered to avoid that...and slowly dissolving gunk over time usually works, but few people have the patience...
I don't think the VVT would cause the significant power loss you're noticing, some loss at higher RPM perhaps, but I think you've got multiple issues...
I would start by addressing basic engine condition...and if it's knocking, you've got a bearing clearance problem...and the metal flakes are a very, very bad sign...there should never be flakes big enough for you to see, microscopic metal bits that stick to a magnet...that's one thing, but if they're big enough to see, it's likely that you've got major damage.
There is a small screen on the VVT oil inlet that could be plugged up with sludge/debris...easy enough to pull the solenoid and check...
Time to pull the pan and check the main bearing and rod bearing clearance...I don't know the spec on this engine, but generally, it should be about .001", so get a set of plastigauge strips from NAPA and take a look...
If the oil pressure is good, there's hope...I too wonder why you've got good pressure with a knock, if the pressure is low downstream from the pump, it will be low at the port as well...
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