cant find anything loose it knocks only at idle in water????

does it knock really hard when you turn the engine off? Have you ran the engine out of the water and watched the engine with the seat off.
This happened to me the magneto flywheel bolt snapped off and grinded in the stator...

pull the pump out & grease the driveshaft spline.

I have a 96 XP and have heard that same noise also but cant figure it out... Its mostly when the motor is coming down almost to an idle after WOT... DUNNO? I just told my son to ride it til she blows

Oh pulling the pump out isnt neccesary cause the splines * impeller are under load and will not make noise...O nly out the water!

At idle, the engine rotation is in no way smooth. Being a two cylinder there is two pulses per revolution and these cause backlash at the prop splines. As the rpm increases, the pulses frequency increases as well as the extra load holding the splines against the thrust face. A heavy body grease dampens the backlash.

what are your rpms at idle? May want to bump them up a little

The ski should be turning 3000 rpm at idle out of the water and at 1500 in the water. One bitten is probably right, low Idle!
Good luck. TCR

Its been several years, but I if memory serves correct, when my 96 XP was low on idle, it sounded like it was knocking and vibration was more evident.
Weird characteristic of that (rotax) rotary valve engine. One thing to note is that the 787 Rotax motors vibrate ALOT. This problem was alleviated/corrected when they developed the 951 motor. They added a "Balancing shaft" to minimize the vibration that the 2 cylinder emits. They also did away with the rotary valve and went with reed valves.

Also, Get an aftermarket tach and set that idle.