kwned is a rarely used edition of the word owned and pwned.
In certain first person shooter games (namely Counter-Strike), players are equipped with a primary weapon, a secondary weapon, and a melee attack. In Counter-Strike (CS hence forth) players are given a knife. To "kwn" a person would be to own them with the knife.
Note that the K indeed stands for knife, and to use it in the context of being hit (such as in Halo) would be incorrect.
'Klwned' is similer to pwned, in that people are made fun of/look stupid. To be klwned is to pwn oneself, making a complete idiot of yourself. People usually klwn on a BBS such as the one at newgrounds.com.
Person 1: we make fun of windows cos of its lack of reliability, the mac is WAAAAAAT more reliable Person 2: lol klwned.