You may be right. I remember reading a blog a couple of years ago where a dude cut an engine in half with a laser and pointed out stress cracks in the cylinder wall behind the liner that they figure were being caused by over torquing head bolts or something like that. Anyway, I think that was the idea behind the flanged liners, to provide a pressure seal and not necessarily to prevent any sort of liner movement.

In any case, back to this topic - I still think that knock is related to the cam or valve train somehow. Moving liners still just doesn't make that much sense to me.