Since the tube it bolted to the bed plate in two places... and is a PITA to remove even after those bolts are removed I dont think the pickup could fall out... BUT it could very well be clogged up if the engine has built up sludge.
Either way, if its knocking... damage has been done.
Did you change the filter? A bad filter can cause these issue.
With the fluctuating oil pressure I would normally suggest you check the sending unit... but since its knocking at the same time then that rules out the sending unit.
You MAY be able to run some flush through it and then try adding FULL SYNTHETIC which is also a SLUDGE FIGHTER... run that for a short time and change it ... with FULL SYNTHETIC... If your LUCKY this will clear any/all sludge in the engine and will clear up the pump IF it is indeed SLUDGE causing the issue. Cross your fingers and hope the damage is minimal.
GOOD LUCK & please keep us posted.
SPEED SAFE, AIR RAM