I'm not sure how much more overpowered you can make the Lucky Knight... seriously.
I don't understand...the Lucky Knife is overpowered? 
Before your change, there were better options available (see Rune Blade).
After your change, it's my primary weapon of choice and it's probably very overpowered for the WoB...
Its hit% should dictate that it isn't as effective as a convential weapon. I mainly designed it for the magic user--I'd be curious to see/hear specifically how its overpowered.
Well, it wasn't quite thought out. Right now I'm using it for pretty much every active fighter (with the Lucky Ring).
I don't use the magic user for this purpose behind of the following..
1) Still learning magic - time is mostly spent doing this.
2) Evasion is valued more since defense is not catching up. The Defense Knife is more valuable for this purpose. Fighting suffers, but when you have 2 or 3 fighters, it a real non-issue for another support-fighter-mage.

The attack power boost probably does help it a bit.. but I'm primarily put off with the nonexistant evade/magic evade bonus. If I can get the power from at least 2 fighters, I'm not willing to leave the magic user as vulnerable for that reason alone...
Think about it like this.. until you assemble a multi-mage group (a group of at least 2 mages in the party), I don't quite have a use for it.