rich knock, grrrrr!

[turbo buicks]

ok im running a 70/30 alky/water mix. 21 psi. fuel pressure is unknown. car runs great at nite but in the day it get really rich (840-850 O2s and sometimes even 800s and 890s!!! even at this much richness its getting 8* of KR which will slowly go down. i tried taking 4% fuel out at wot with the translator. got it at 6% lean now but have not run it yet. should i just keep on taking out fuel till the O2 gets at a reasonable number? what is rich knock anyways? can it hurt a motor or is it false?

p.s. at night when its cool car runs great with great O2 numbers and little or no KR. i think this is cause its cooler out.