I knew it wasnt bent valves because like you said water doesnt compress very well so thats why I figured it was a spun bearing due to the force pushing on the crank. If the sound was knock against the cylinder block wouldnt have it blown right away? He drove the car around for 2 days like that. I really dont know since this situation doesnt come up often.
Youre right though that carnage doesnt happen from bent valves or spun rod bearings.
And hell yeah we went back to the CAI. Its a lesson learned and I sure as hell hope its one that doesnt get made twice.