It can mean a couple of things - either you somehow hurt yourself and become unconscious (for example, you run into something and hit your head) or it's a sarcastic way of saying "go ahead and try your best, I think it's hopeless."
Depending on the tone of voice you use, "Knock yourself out" is an idiom that could mean "Go ahead", or "Show me" or "I don't really care what you do".
you will knock yourself out i think
"Have at it" means "give it a try". Another similar colloquialism or idiom would be, "Go ahead, knock yourself out", or "Go for it".
Hit yourself on the head with a baseball bat hard!
Knock on wood means you are hoping that it happens.
Entering a House - "Ko ko!" means "Knock knock!"
knock each other out
knock-kneed
At your house.. Sure, knock yourself out. But in public... No.
knock that person out so you can get yourself out.
Full House - 1987 Knock Yourself Out 1-7 was released on: USA: 30 October 1987
Knock on wood means you are hoping that it happens.