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you should have received some C spanners with the coilovers, and these are used to looosen and tighten the rings that need to be turned to lower/raise the car. make sure these are nice and tight when you've finished adjusting them!
erm i can't quite remember, its been like 8/9 months since i adjusted mine last! i think to unlock them, u have to put a c spanner on each one and then twist in opposite directions and them after that i can't remember.
i think you may have to twist both of them in the same direction to adjust the ride height!
you loosen the two rings from each other, then you can adjust the one the spring sits on. the lower one is then used to lock the higher one in place so it doesn't move after that.
The knocking noise is very common if you managed to buy the G-Max coilovers that PhilJ sells. It hasn't been identified what the problem is, but in my mate's case it was the loose topmount on the passenger's side