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I would say that buying this other engine might mean you end up with two engines with problems.
Unless you are guranteed that the other engine is in good running condition, or the one in the car now is terminal, I would suggest you give good thought to rebuild the one in the car
That knocking noise could be valves out of adjustment, a loose connecting rod cap, or a worn piston.
The first thing to do, is determine the condition of the engine that is in the car. If the engine runs, try to determine wether the noise is coming from the top or the bottom of the engine.
Noise from the top would probably be valves. From the bottom could possibly be connecting rod cap, or piston.
I don't know what your mechanical capabilities are, but I will suggest that whichever route you go, get yourself a Toyota shop manual from < books4cars.com >
I promise you will be glad you got one, the Haynes or Clymer manuals don't compare.
The MR2 engine will swap right in, but not the gearbox (the linkage is on the opposite side and would need to be modified).
Some of the accessory mounts (alternator/power steering) will probably need to be swapped but that is not a big deal.
The later (newer) 4A-GE engines have a larger diameter connecting rod journal, making the crank stronger, and more stiffening ribs on the block, making the block less succeptable to flexing. Those are known as 7 rib blocks, and I think started in the 1989 GT-S (AE92, FWD) Corolla.
That would be the better engine, although the older ones are still good engines, and will do just fine.
Good luck.
(The only stupid question, is the one that doesn't get asked, which costs you in the end)
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'88 Corolla, AE92 SR-5, 7A-FE swap/GT-S suspension
'87 Corolla, AE82 FX-16, 4A-GZE swap (autocrosser)
'03 Tundra 4X4 Access Cab, (FX tow vehicle/Home Depot runner)

Modification: Changing something to what you thought it should have been from the start!
Last edited by Donald; 11-07-2011 at 07:44 PM.
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