Well first thing, make sure that the knocking noise isn't actually coming from the engine itself (like a bearing going).
If Oil is coming out, it could be the seals gone on the turbo itself (in the center section). I know you bought the car used but really you may want to see what the dealer is willing to do for you.
Also note that you have an oil screen filter in the banjo bolt that goes to the turbo on the oil feed line. That screen is known to getting clogged up and starving the turbo of oil and seals / bearings go bad due to it. Its not something most people stay on top of or take out so its something to look into.



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