Peter,
Speaking as someone with frangible knees, great sympathy and empathy your way for the knee pain. Makes me shudder just to think of it.
I had a bout of this last summer when trialing various SPD pedals (
http://www.thorncycles.co.uk/forums/index.php?topic=6943.0 ). For me, the problem was release tension that was too strong for me, even when dialed to the minimum. Solution was a set of Shimano T400 Click'r pedals that have about 50% the usual spring tension -- also set to minimum tension -- with multi-release cleats on Shimano MO88 shoes. I tried many combinations before I found something that would work for me.
Doesn't sound like your problem.
Apart from the spring-tension issue, I found the
multi-release SPD cleats also allowed me a bit more float.
If you've got pain *while* pedaling, there may be something else going on or something has changed. Perhaps those shoes and insoles that have simply worn till they are no longer as supportive. I use a small foam wedge at the inside edge of the heel to set my ankles slightly straighter; did wonders for eliminating knee pain as well. Are the springs lubed to allow free float? If the springs/pedal cleats are too tight, that can restrict movement.
Hmm. Any change in saddle, saddle height, or fore-aft positioning?
Best,
Dan.