Knee pain (more in the front of the knee) if saddle height related, tends to on longer leg. Although a Leg Length Shim does sound like a good idea http://bikefit.com/c-3-leg-length-shims.aspx The body tends to compensate some so that is why you usually do not make up the complete difference in length.
Sounds like other fit issues are happening.
I would also read this http://bikefit.com/s-13-road-bikes.aspx and see what seems to make sense. Find a BikeFit Pro. You need good advice on this.

Good luck