What are the rules for Any%? Are you required to play normal difficulty or can you play easy? Are you allowed to use any form of Knack? And when does the timer start and end?

You start from a new save file, time starts when you start the story and ends when you lose control of Knack. Any difficulty is acceptable, but easy is most optimal if you want to get technical

If you want to use a hard version of Knack in the run, use Diamond Knack. His stats are maxed and on easy he wont die easily.