Diesel Engine Specific Aid

This beautiful 1982 300 SD has been making a knocking/banging sound that I think is coming from under the valve cover. The noise is not audible at low RPM or before the engine warms up completely. At higer RPM 1700+ the noise becomes increasingly loud and is directly rythmic with the speed of the engine. After probing the noise with a stick I think it may be from what I think is the oil pump (under the oil filter, or the transmission. The trans was probed at the bell housing also close to the oil pump (I think.) Is there anything that could make a loud noise such as this in these areas?

I have a '76 300d and i got fuel with water in it out of an old container that was supposed to be sealed. I made it about 200 yards before it died. I have changed both fuel filters taken all fuel lines off and blew them out and turned the engine over until clean fuel was squirting out of the injector pump and i even took the injector nozzles apart and cleaned them to make sure there was no water stopping them up. I have also put new glow plugs in it. It will still not start it will try to hit a time or two when u first try to start it and then no more it just turns over.

I have never really understood, on our 123's, why I have to return the key all the way counter-clockwise if the engine fails to start. Strange voodoo with the vacuum shut-off? A peculiarly odd tuetonic accomodation for the hearing-impaired? What prevents it from functioning. Every now and then I have trouble with the switch stopping before the crank position, no matter what I do. Is this something that popping the cylinder and spraying WD40 would help? It is so intermittent that I could go for weeks without it happening again, or I could get stuck at the drive-up tomorrow. Thoughts?

I am wondering what the container that is in the side compartment near the gas tank in my 300td is?