I think you can safely rule out a few things. The bearing on the driveshaft is not the problem. You can't hear that unless you're moving. They usually howl.
(The hollow knock you describe sounds like piston slap, and it's common in these engines, and pretty much non-life-threatening).
The timing belt won't cause a problem like this- if it fails it won't run any longer. If it jumps a tooth (unlikely) it will continue to run poorly from then on.
You could have a failing crank sensor ($45) or a fuel pump relay on it's way out ($20-40 depending on source). Usually these also cause no-starts. Replace the relay first to see if there's any improvement.
The transmission could slip and give a sensation of power loss- however, I'm sure you'd notice the engine racing. It would be exactly like stepping on the gas in Neutral or Park, a whole lot of noise and not going anyplace. Is that what happened? If so, it's almost certainly low fluid. If fluid is OK, keep checking engine stuff.

I've just recently had a similar problem in my '87, which doesn't have your diagnostic port or the crank sensor, so I'm checking out fuel pressure issues- mine seems to be worse with a low fuel level, so I'm thinking it's the in-tank feed pump. I can produce a symptom of power loss (almost totally cuts out) if I ride the brakes with my left foot, and floor the gas. I get 10-15 seconds of good power, then it almost stalls. Sometimes it happens if I accelerate too quickly from a stop too. My next step, to make sure, is a fuel pressure test. You sound like you need one as well, to rule that out if nothing else.

Good luck to both of us!
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Rob Bareiss, New London CT ::: "Roterande Fläkt Och Drivremmar!"