I just bought a 86 TY350 that's in excellent condition. It's has a Falcon mono shock and a aluminum silencer but appears otherwise stock. The previous owner claims it has a new rebuild but the bike wouldn't start.

I cleaned the pilot jet and noticed the needle has a funny shape, almost a bulb on the tip of the needle. I assume this is normal? Anyway, after cleaning the carb it started up and runs great EXCEPT, a horrible knocking engine noise. I first thought it was the piston pin but after reading about "pinging", I now wonder if there's too much distance between the piston crown and head? I understand how to measure the distance but how much clearance is critical?

Thanks

I would go back and look at the needle. Pull it out from the slide. Is the retaining clip still holding the needle in position? Sounds like a new needle is needed before you start chasing your tail.

Pinging and knocking are very different sounds caused by very different issues.  Pinging (pinking for our overseas friends) is usually caused by too lean a mixture, too much timing advance, or too little distance between the piston and head (squish height).

 

A mechanic's stethiscope,or even a piece of hose, can be used to listen to the upper and lower parts of the engine to identify where the "knock" is coming from.

 

The carb needle is definitley NOT supposed to have a bulb at the tip.  Such a bulb could cause a lean condition at idle which could cause pinging.  The "bulb" may be a buildup of foreign material that can be (gently) removed, or better yet, replace the needle.