Yeah, it could... as the DME uses the cam signal to compare to the crank signal for comparison and that tells it the vanos positions and how far advanced or retarded to put the ignition. If it doesn't see cam signal properly it will advance the ignition to the point of pre-ignition causing valve knock. The knock sensors will keep this in check mainly, but it should smooth out nice once you replace the sensor.

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2003 4.6is