I've worked on a few diesels over the years. One thing you've got to watch very closely is having enough and keeping enough water in a diesel. With those heads running HOT, the water is CRITICAL on keeping it cool. Those fuel injectors are basically Flame Throwers!! Like someone said, they suspect something else besides a busted water hose. Had it been a water hose ONLY issue, and they stopped IMMEDIATELY, not 1 mile down the road or further, then replacing the hose would be the repair and top off with antifreeze/water. Running a diesel HOT and without WATER going to the head will result in warped head or blown head gasket. Diesel heads can not be shaved due to high compression ratios being changed. In other words shave the head and you get "Detonation" rather than "Combustion". That knocking could be either a blown head gasket letting water into the combustion chamber, or a rod knocking on the low end and possible spun bearing as someone mentioned earlier. I might do an oil analysis. That will show lots of information before you start tearing into it. A visual inspection of the oil is a good start. You could drain all the oil and inspect the rod caps to see if any are spun or damaged. Also I would run a compression test with a "High Compression Gauge"...NOT the regular automotive type because those levels of compression in a diesel get into the HIGH range and will blow a regular gauge apart, or ruin it. You're looking at pressures upwards of around 500 to 1,000 psi or more possibly, depending on the engines. Usually the most expensive repairs on diesels are #1) the fuel injection pump 2) turbine / blower 3) engine mechanical failures...piston...rings...rods..etc. Hopefully you didn't do much damage. Let us know after inspection and testing. Good Luck!