The 22-year-old from Dallas defeated the 18-year-old from Kensington, Conn., after playing 32 of the scheduled 36-hole final.
Knost, a recent graduate of Southern Methodist University, strengthened his bid to make the 10-man U.S. Walker Cup team in September and earned a likely invitation to the 2008 Masters Tournament.
Should he make the Walker Cup team, Knost is not sure if he will remain amateur and accept a Masters invite.
'I don't know what's going to happen,' he said. 'It's a great problem to have. It's a great honor to hopefully get an invitation there. ... We're going to see what comes along, see if I can make the Walker Cup team first and then go from there.'
In the morning round, Knost jumped out to a 3-up lead after three holes, beginning with a birdie on the par-4 first hole.
Paladino, who will enter Baylor University this fall, then bogeyed the next two and was forced to play catch up the rest of the match.
Knost parred his next 12 holes while Paladino balanced two birdies against two bogeys and didn't pick up any ground until he birdied the par-3 13th.
'I got off to a pretty poor start and never really found my swing,' Paladino said. 'I just didn't really have it today.'
Knost responded with an eagle on the par-5 14th to again go 4-up. He bogeyed the par-4 14th, but remained 3-up following the conclusion of the morning round
'I told myself going into match play that I was going to make them beat me, I wasn't going to beat myself,' said Knost, who made just seven bogeys in 112 match play holes.
Paladino struggled again on the first three holes once the afternoon round began, again bogeying No. 2 and No. 3 to put Knost 5-up.
Knost continued to churn out par after par and went 6-up when Paladino bogeyed No. 9 then 7-up with seven to play. Paladino extended the match by winning the next two holes. Knost clinched it with another eagle on the par-5 14th.
'He definitely proved to be a machine out there,' Paladino said. 'I was waiting for him to maybe make a mistake here or there to capitalize on but it just never happened.'
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