The in game guide leaves out something very important. I replayed it over and over again and just couldn't move on, couldn't find the knife, it talked about.
It leaves all this out, that I found in the WT,
"Place the MECHANICAL HANDLE on the mechanism by the door (U).
Click on the handle to release the gate.
Place the ROSE EMBLEM in the round slot (V).
Go through the door to end the chapter."
Once I did that, the knife was where it was supposed to be, I was also able to find the cursed object and the silver apple.
Thank God for WT's, I was about to throw in the towel on this game.