You could trying to tape the knot to protect it then get to hand sanding. Once you get the old finish off stain it the color you like then seal it with a marine finish. I’ve used waterlox on my brushes but they have only been in use for a short period of time. I did finish a vanity counter top with waterlox some 8 years ago for a client and haven’t seen or heard any I’ll affects from water and it’s used daily.