She has beautiful conformation, nothing glares at me knee problem, but she is only standing still.
I would be concerned about the knee issue as well, its only something that a vet would be able to tell you if she could come back from it or not.
Only starting 4 times, and then the knee gave her issues suggests that it wasnt a strong joint to begin with, I know a lot of OTTB's that have started many times and retired sound (although there are just as many that that is not the case) Although beautiful, she is a stunner, you may take a chance and just keep in mind the fact that she may never be sound enough to do something as demanding as eventing. The jumps would put a lot of pressure on that knee.
Again, a vet would be able to tell you more, if you are looking to only have one horse, I would definitely not move on her until she was evaluated by a vet.