I also let the oil get low in my Ramcharger and my 318 started knocking. I know it is a bearing, so now it gets a 360 once I replace the heads. Luckily my 68 Camper Special is still running. I recommend replacing your motor Bubb. Now is the time to decide what you want from it and how big you want to go.
I looked around at rebuit motors and decided I didn't want to invest $2k +. If you want to go that way, there is a shop down by Sumner off of the 512 & 167 interchange that has a good rep and has been there a while. Performance engine development is on River rd in Puyallup. I'm not sure if there is a shop in Bremerton that rebuilds, but maybe. There is also a place in auburn (US engines?). If you want used, I have what I was told is a running 318. It wouldn't take much to hook it up to see if it will. The motor turns good by hand and is still sitting in the frame of a 68 D100. If you want to come to Spanaway one weekend and help see if it runs, I'd let it go for $250(obo) complete minus the 4 speed. Or you could call around the sound to the wrecking yards for any 318 up till the magnum series and it should work also. They didn't change these motors much over the years, thank goodness for that!
I'm working up at Mt Baker during the week for a couple of weeks, and working on my Ramcharger on the weekends so drop me a line at rustyraindog@aol.com if you are interested. I also have a slant six in a 71 d100 that ran when I parked it last year if you want a leaning tower of power!