That engine has a known problem with carbon build up. Here is a TSB addressing the issue.
File In Section: 06 - Engine/Propulsion System
Bulletin No: 01-06-01-028A
Date: March, 2003
Engine Knock on Cold Start
1999-2002 Chevrolet and GMC C/K Pickup and Utility Models
2002 Cadillac Escalade (2WD)
with 4.8L, 5.3L or 6.0L Engine (VINS V, T, Z, U - RPOs LR4, LM7, L59, LQ4)
This bulletin is being revised to add an additional engine to the models section. Please discard Corporate Bulletin Number 01-06-01-028 (Section 06-Engine).
Some of the above vehicles may exhibit an engine knock noise that begins in the first 19,000-24,000 km (12,000-15,000 mi) of use. The knock noise is most often noticed during initial start-up and typically disappears within the first 5-30 seconds (may last longer in extreme cold temperatures). The noise is usually more noticeable on the initial start-up when the temperature is below 10 C (50 F) and may be more pronounced on the first cold start following a long trip.
This noise may be caused by an interaction between carbon that has formed on the piston, the piston motion and the cylinder wall. GM Powertrain Engineering, and an analysis of engines with this condition, has confirmed that the noise is not detrimental to the performance, reliability or durability of the engine.
THIS NOISE DOES NOT HAVE ANY EFFECT ON THE LONGEVITY OF ANY OF THE ENGINE COMPONENTS.
Important: At this time, attempts to repair this condition by replacing the engine assembly or pistons are not recommended.
Please share the information found in this bulletin with customers who inquire about this condition. In the event they have additional questions or concerns, please advise your Area Service Manager.
Friday, August 20th, 2010 AT 10:12 AM