dude at that price, with a new trans and its in decent condition he's pracically giving it away.. jump on it!!!
as for rod knock.. can you tell if it does it every revolution of the engine, or every other revolution? or post a video (i can tell by listening) this would help greatly (for instance, cam, exhaust leak, lifter noise, or other such things happen every other revolution, where as a rod knock would happen every revolution, thus twice as "fast" as say, an exhaust leak or lifter tick would sound)
if it's a lifter tick, i wouldn't worry about it.. a ticky lifter isn't really a big deal IMO.
if it IS a rod knock, a set of new bearings would probably take care of it.. if not that, turned crank and undersized bearings. IMO those 4.0's are great engines, really solid bottom end and they last a long time (except for the head crack if overheated issue on some years) but the heads were improved by 94 i think.