Does the speedometer agree with a scan tool reporting what the ecm thinks the mph is? In other words, is the problem in the mechanical speedometer or in the speedometer gearing in the transmission, tire height, rear gear, and/or maybe the vss on the back of the speedometer? The speedometer is just a display, and isn't controlled by the ecm like it is on later cars, so it can fail without the ecm ever noticing. If the ecm knows what the speed actually is, it won't cause knock because of that no matter what the speedometer says. Getting the fueling right at the 2-3 shift is hard because the engine passes through that rpm range under two different operating conditions at wot, once when spooling up in first gear under light load and very rapidly increasing rpms (the load in 2nd gear is low enough that it acts like 1st gear on the 1-2 shift so for tuning you can treat it as two sets of conditions, not three), and once when it drops down to that rpm range under full load and slowly changing rpms at the 2-3 shift. Get it lean enough for great spoolup and you will get knock on the 2-3 shift, get it right for the full load conditions and it will be rich and spool slower in first. That's why the mph input matters on chips like the tt that use the mph to know which gear the trans is in so it can adjust the fueling for the different load conditions.
PS I'd like to strangle whoever coined the phrase "false knock", because everyone wants to assume that any knock is false when like Bison said, mostly it is real. Always assume knock is real until you have proven it is false, not the other way round.
