heard a knocking sound. None of my Dummy lights are on. I checked the oil.
it was full. Someone said maybe the knock sensor was out so I replaced it.
Still there. It gets louder as the engine is reved up. I thought maybe it
was the lifters but when I took to the local shop he said he thinks the
noise is coming from the transmission. Could this be right?

Sure it could.  After all - a mechanic who actually leaned over the car and
listened to it, looked at it, and probably knows something about cars in
general has said that he thinks the noise is coming from the transmission.
Why would you think that a bunch of people in a newsgroup with no access to
your car would say that it's wrong?

A knocking sound could be a hundred things.  Well ok, maybe not quite a
hundred, but quite a few.  If you really want a "second opinion" from a
newsgroup you'd have to provide a lot more of a description of the sound.
Still - there's nothing like a capable individual actually seeing the car.