Where on the skirt did you measure and get that .0055"? You should flip the piston upside down, and using a micrometer (not calipers!) you should measure about 3/4" from the end of the skirt. Dont measure the skirt at the end cause thats the crush zone. Yeah JE does recommend a bigger gap, but I always ran it tighter than they recommended. Usually .002"-.003" at the most. Sometimes as tight as .0015". Hypers, I usually honed to get .001-.0015" and TRW forged and Ross forged about 002-.003". They will usually manufacture the pistons in a way that gives you the proper clearance if you simply take the bore to the exact number. Say 3.830" is a .030 over bore, and the piston measures 3.828 3/4" down from the end of the skirt. Obviously you have a .002" gap and the manufacturer cut the piston to give you the gap they recommend.
A .0055 gap on a 3.8" bore is really big, but I think the knocking is coming from somewhere else, like a crushed skirt causing it to bang around or maybe a loose pin or improper cam slope cut into the skirt. Could be anything. A gap that big will bang around but not enough to set off that much KR. hopefully they didnt treat your main and rod clearance the same way. This isnt a 1967 327 small block chevy where you run big gaps to make the motor live at 7500 rpm. The TR motor makes ALOT of cylinder pressure at low rpms, and it needs to be gapped everywhere with that in mind. Too much oil will bleed off at low rpms with big gaps, which is right where you need all the oil pressure you can get. There are too many machinists out there who wont spend the money to buy the book with all the clearances for all the motors, and they end up doing everything by "feel".
I dont know what everyone else thinks, but that oil pressure (18psi) seems low to me. Try dumping that oil and throw in some valvoline SYN 20w50. I put that stuff in this weekend and I cant believe how much quieter my engine is now. In independant tests, that SYN oil outperformed and outlasted every synthetic they tested it against. I had 10w30 in there before and it sounded like a damn rock crusher. It was eating alot of oil too. I think whoever did my engine made some big clearances, and this quieted everything down and should reduce oil consumption. I dont have an oil pressure gauge which sucks, and Ive just sprung a huge oil leak somewhere in the front (before the oil change) and cant find it! There is oil and grease everywhere! YUCK.