I think having someone put a crank in yours might be a better way to go. or at least check feasibility.

Im assuming this is your first boat ?? You have a HUGE learning curve in front of you !!

Aren't the 470's the infamous 4cyl with aluminum block and cast iron Ford 460 head....that had some weird crank pulley mounted alternator or stator or something ?

I think you are correct, alternator was built into the balancer, which may be the knock. Good thread on them here 470 mercruiser questions??? - The Hull Truth - Boating and Fishing Forum

If it is a bad motor then I would think there are a ton of options for an upgrade, a straight six would be neat.

Why would you assume that? We have 9 boats. We've been liveaboards for almost 6 years with the first 2 years anchored out. This is our first Hammond, but thanks?

Yup!

We're thinking of swapping it out for a Mercruiser 3.0 140 hp, any thoughts on that?

They are decent motors, I cant speak to whether engine mounts/bellhousing will interchange.

If you are gonna change to something different than the orig engine, go with the 4.3 v6 or 350 v8. They are both available as passenger car engines, so rebuild able cores are plentiful and cheap. The 3.0 is a boat and forklift motor. Scarce, expensive, underpowered, and rotted out from having raw water in them all their lives.you would also have to mess with props to get that 3.0 to run with that 1.6 something drive. ALSO,if you are not repair-rebuilding this motor, RUN IT TILL IT DIES!!! Just have Seatow or boatus and don't go out the inlet!! You might see it run for quite some time. Just cuz one guy said it is a rod knock doesn't mean it isn't a timing chain tensioner noise or something else that could bang around a little without throwing pieces out. BUT, if you are considering fix g this engine, which may be the best option, don't hurt it any worse.

Wow!! Thank you!! We'll look into ALL of this!