318 just started knocking???

I am trying to sell my '71 Scamp, which is and has been a very solid, strong running 318 car. Took it out to run some errands the other day, parked it, and when I started it the next morning to move it, there is a knocking coming from what seems like the drivers side. Hard to tell, but noticed some brown water spitting out of tailpipe, too. Friend said start with checking tightness of torque converter, then move on to heads, but wanted to pose the question to all of you. Need to get it diagnosed quick as weather is getting warmer and need to get it out to the shows to get some exposure. Thanks ahead of time for your suggestions.:prayer: