As I remember, you bought a Knight USA American. That means it has a 22 inch barrel. Also it probably has a #11 nipple so shoot only loose powder. So large powder charges are not even going to be an issue. When I have a rifle with a barrel that short, I pretty much limit any powder charge to 100 grains of less.If I were you I would try starting at 80 grains of Pyrdoex RS and a 240 grain XTP for starters. See if that groups well for you. That should be a very low recoil load, and still lethal out to 125 yards for you if you can place the bullet.

If that projectile does not group for you, then you might have to start searching. I have had good luck with 300 grainSaber Tooth Conicals out of my little LK-II with 85 grains of Goex 3f. Another good load is the 250 grain Shockwaves. 270 grain Ball-ets also shoot well. All you can do is try different loads until you find something that works.

Remember, scope eye is caused more by not addressing the rifle properly then it is recoil of the rifle. 3 -1/2 inches of eye relief should be fine. I personally like 3.8 to 4 inches but shoot some with 3.5 inches with no problems. If you have that rifle snug to your shoulder and have a good firm grip on it, your shoulder should soak up that recoil before your eye. Hold the rifle properly and work more at addressing it, and not flinching and your accuracy will be there.