Okay, more digging into this... BHP says, "okay to drive, it just won't be high performance," with a bad knock sensor, but also that it's an intermittent problem; they couldn't get it to misbehave, and there's only two faults logged in the DME, both #32, "knock sensor #2."
However, they mis-estimated the repair costs; it's around $900, which, doing a rough calculation, is 6 hours of ('shop') labor and an $80 OEM knock sensor. (Bosch generic equivalent is evidently part no. F6020-12768 -- probably exactly the same part -- and it's $50 where I've found it.)
Looking at the 968 workshop book, it looks pretty involved to get to it:
Knock Sensor Replacement:
1. Unbolt the intake rail from the engine. (The coolant hoses remain connected. The intake rail remains in the engine compartment.)
2. Undo and take out the knock sensor(s). Disconnect connector.
3. Reinstall with a new genuine M 8 x 30 bolt (micro-sealed) *without washer*. Tightening torque: 20 Nm (15 ftlb.).
Note: Handle the knock sensor very carefully. The knock sensor must never drop to the ground from greater heights as this may damage the piezocrystal.
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Intake rail instructions:
1. Remove air cleaner assembly complete with air mass sensor. Remove engine covers.
2. Undo distributor cap, pull off plug connectors, unclip cover for fuel rail and put aside along with ignition leads.
3. Pull off connector for oil temperature sender and camshaft adjuster. Unscrew fuel return and feed lines from fuel pipe, making sure a second wrench is used to lock. Undo fuel rail at intake distributor and take out along with injector valves. Put fuel rail complete with wiring harness to the rear. Do not kink fuel lines.
4. Remove engine undertray. Undo exhaust system at exhaust manifold / exhaust pipe flange.
5. Pull off coolant hose between reservoir and thermostat housing and catch coolant in a suitable container.
6. Remove ATF reservoir from body. Remove coolant pipe with heater valve. Bend heat shroud slightly forwards.
7. Pull connector off idle speed positioner and throttle valve switch. Unhook throttle valve operating gear and remove bracket complete with idler. Pull vacuum hose off intake rail and throttle body. Remove coolant hose from reservoir at throttle body.
8. Remove oil dipstick. Pull vacuum non-return valve from brake booster. Remove coolant host between radiator and cylinder head from breather flange. Undo intake rail at left-hand engine mount.
9. Remove bracket for oxygen sensor connector from intake rail. Loosen breather hose at oil separator and coolant hoses at connecting flange and pull off. Remove wiring harness bracket from connector flange.
10. Detach and remove intake rail from cylinder head.
Yikes. And who knows how many of those hoses / etc will be brittle and self-destruct when mucked with, given the car's age ('94 which, despite Flash's insistance that it's a "late" '94, has a DMV-recorded sale date of October, 1993; she's got about 92,000 miles on her). It could be a hornet's nest.
So, assuming the worst...
Reading the 968 Workshop book... When a knock sensor becomes unavailable, it looks like the DME assumes worst-case scenario and retards:
"If the knock sensor is faulty, ignition timing is retarded by 6 degrees on the crankshaft."
This is characterized by, per the manual:
Poor pick-up
High fuel consumption
Poor engine power
All of the above I can live with *temporarily*, if the car isn't going to be further damaged without a knock sensor, using only Chevron 91 octane CA gas.
I barely drive her these days, just enough to keep the moving parts moving (once/twice a week for a few miles). That will change after the Bar, when I have substantially more time and money...
WWYD?