So under warranty replacement, I had new Bilstein PSS B14 front coilovers installed, and the originals returned. Bilstein confirmed the problem (knocking noise) and returned my $624 core deposit.
Now, 13 months and 22,000 miles later, the knocking noise has returned. Only over small, low speed bumps... Will be calling Bilstein tomorrow to start the warranty process over again. What a hassle. Plus I will be out another $500 or so in labor for the installation, alignment and return postage.
540 M-Sport package (Canadian market), factory Bluetooth phone kit, factory M-Audio 10" dual voice coil subs, Homelink, M5 rear stabilizer bar, H&R 15mm spacers, Bilstein B14 PSS coil overs, Stop Tech ss brake lines, Akebono Euro Ceramic brake pads, oem Brembo and Zimmerman rotors, Dinan Stage 1 software, Strong Strut front upper stress bar, USA Spec Ipod/Iphone integration.