I think I should have become involved with this discussion earlier on.
The HT4100 site you mention gas really not changed since it was posted. The HT4100 chapter of the CLC is in somewhat of a limbo. Derek Sherwood started it, then sometime later left the club. But, there is a very vibrant and helpful Yahoo group, called the HT4100 Exchange, up and running that was the offspring to this that I started for the purpose of helping those with these engines.
http://autos.groups.yahoo.com/group/HT4100exchange/ There are 2 basic versions of these blocks, the longitudinal and transverse blocks. The longitudinal blocks were used in the 82-85 RWD deVilles and Fleetwoods, and the 82-85 Eldorados. They were available only as the HT4100. The transverse blocks were used on all the rest FWD Cadillacs. In 1988 they were enlarged to 4.5 litres, then in 91 to 4.9. The longitudinal and traverse blocks are not interchangeable.
The 4.5 was an overbore of the HT4100. They used removable wet cylinder liners, so to make a 4.5 out of a 4.1 can be done by simply exchanging the liners. The 4.9 was made by stroking the 4.5. The crankshaft cannot be used in the 4.1 since the nose is much shorter.
Early HT4100's suffered many failures. The most common was head gasket and intake gasket failures. They then also suffered distributor gear and camshaft failures. Many of the cam failures were caused by leeching of coolant from the head gaskets which compromised the oil's ability to lubricate the lobes. The head gaskets failed because of migration on the block. This was caused by split dowels used to locate the heads. Later engines had solid dowels and better gasket material which eliminated this problem.
Intake manifold gaskets also failed, and this was the most common cause of large amounts of coolant getting into the oil. This was repaired by revising the washers on the bolts, the gasket material and revised torque specifications.
They developed main bearing knocks as well. Many early 4.9's also suffered from this. When the engine got hot, clearance in the #1 ans #5 bearings increased so that the crank would move around causing a knock. This generally occurred under light acceleration. The fix was a bearing with increased eccentricity.
Other problems I have seen is the plastic on the timing gear on the camshaft come apart. This gets sucked into the oil pickup screen and starves the engine for oil causing potential catastrophic failure. This usually occurs on a long highway run. But this problem is by no means unique to the HT4100.
Reports of block porosity is a myth. But GM did and does recommend the use of the cooling system supplement tablets. And the coolant MUST be changed on a bi-annual basis, regardless of mileage. Put in 2 of these pills at that time.
I hope this addresses, once again, some of the common questions and myths about these engines.
Now, on the original problem, I would first find out where the coolant is going before I condemn the engine. If you are driving the car and just adding water as it goes down, you are only making the problem worse. Have you looked at the oil? The knock may be caused by the old main bearing issue I mentioned. Or by the coolant oil mix tearing away at the bearing material.
But, in any event, you will be spending upwards of $1,000 on the repair, if not more. A rebuilt engine will cost many times that, but will eliminate the problem, and that would be my recommendation. A swap to another type of engine is a very labour intensive job and will run you into even more, unless you can do the work yourself. Then there is the time involved the "shake down" all those little problems that arise from such a conversion.
Mike