Knock and smoke

Bummer!

This is why normally when I find similar problems, I shut the engine down and don't run it until I run through the paces with diagnosing and have a good idea of whats going on. That way IF there is a problem, I can possibly fix it before causing more damages and costing more $$$

Which is why you cant go off of what every guy says when they say "it just hasnt broken in yet,run it" .....well its definitely "broke" in now lol.

Its strange to say the least when it comes to chunks of the pistons laying up top. And like others said, I would expect to see some damage to a spark plug or some carnage to the valves or something with all that going on inside the cylinder.

BUT you live and learn. Now all you can do is move on and make the next one better.