Denaliano

I placed the microphone on every conceivable component underneath the truck. Absolutely no noise is detected upon downshift. I really don't know where to turn at this point.

lol, you got me taping microphones everywhere! Didn't hear anything on the T-Case with the mic, i padded it really well with foam, and eliminated alot of the wind noise, i'll try the transmission next

Yep, I log with EFILive - I've tested both knock sensors - I bypassed the front KS and then rear KS by jumping the lt. blue/dark blue wires in the harness accordingly to fool the PCM to take both readings from only one sensor at a time. KR occurred exactly the same on ether sensor. I've connected a deaf/dummy knock sensor off to the side, insulated against noise, grounded, etc. And knock does not occur. I now have the stock sensors and the dummy sensor on a DPDT switch in the cab - so I can flip between them while I log and note the performance increase (dummy) / reduction.(stock)

Another thought - Does the PCM detect transmission slippage and initiate KR?

Thanks - I recently upgraded to the Autotrak II fluid about 5k miles ago, when I changed it, there was no significant metal particles present. The truck shifts very smoothly and firmly on the downshift - no drastic jerking or whatnot. I even went as far as placing a microphone, heavily padded with foam and duct taped it to the side of the transfer case to listen for any sort of clunk or clank when the truck goes 100% TP. Didn't hear a thing.

That does NOT sound good! Would debris be present in the fluid? And is the T-Case now on a path to self destruction?

Thanks, I have a spare MAF, a couple of cans of CFM cleaner and hose it down frequently, so that's immaculate. I even put the stock air box back on. Still KRs. Thanks for the suggestions guys, keep them coming if you think of anything!

It's all stock except for a K&N FIPK and the upgraded 'vette servo from OPT. I've taken the engine up through various RPM ranges in neutral, nothing showed up on the scanner.

Thanks Krambo I've been discussing this issue with Butch @DenaliTrucks.com, the Westers distributor who originally loaded Lyndons tune and JustinSS @Blackbearperformance.com I've ruled out faulty knock sensors with suggestions from Butch. Justin has had me run through a myriad of scenarios, as I scan and log with EFILive. He's reviewed my logs and confirms the issue as I've stated. The truck will not retard under conditions such as manually downshifting into 2nd and then going 100% TP. He's also suggested I modify my AFR to 11.2 and make a few runs. The KR is still present. Again, this issue exists in both my Tuned PCM and my Stock PCM. So we really are leaning towards a noise, stemming from a transfer case or transmission component.

Hey guys, hopefully one of you may have an idea. I've been battling a knock retard issue with my Sierra Denali for a while now. Quick lowdown - I'm getting max KR during a WOT 4-2nd and 3-2nd downshift. I've eliminated every possible scenario with the engine, exhaust, suspension, tested the knock sensors, it's definitely not detonation. It's Westers 91/93 tuned, yet it will still behave the same with my stock PCM installed. So I'm down to something transfer case or transmission related. As you guys know, The SSS and the SD share the same exact AWD transfer case (NVG149) and the 4L65E (HD) Transmission. If you have intricate knowledge of these components, and what could possibly causing a noise that would be interpreted as false knock, please speak up