It is unclear whether Smith will need to undergo a procedure to drain fluid from his knee at this point, the source said.
A second source close to the player said Smith started complaining about knee pain during the Knicks' first-round series against the Celtics. However, Smith did not mention the injury or any knee pain publicly during the playoffs or use it as an excuse for his poor play. He said after the Knicks' Game 4 loss that he deserved all of the blame for the Knicks' struggles against the Indiana Pacers.
The injury appears to have impacted Smith's shooting.
The NBA's Sixth Man of the Year averaged 22 points on 48 percent shooting in the final month of the regular season but struggled with his shot in the playoffs. He averaged 14.3 points on 33 percent shooting in a disappointing postseason.
Smith first suffered knee pain and swelling in early March. According to a source, it flared up again in the playoffs.
The New York Post, which earlier reported the injury, reports that Smith likely will have his knee drained in the next two weeks.
Smith got off to a strong start in his first three playoff games, averaging 16.3 points on 43.5 percent shooting. But Smith was suspended for Game 4 of the Knicks-Celtics series for elbowing Jason Terry in the face, then his play suffered. Smith scored 13.5 points on 29 percent shooting in the eight games after the suspension.
Smith is expected to test free agency this summer, and his postseason struggles may impact his market value. New York has Smith's early Bird rights and can offer him a four-year contract starting at approximately $5 million with standard raises. Another team with significant cap space can offer Smith more than $5 million annually.
Carmelo Anthony also dealt with an injury in the playoffs that appeared to impact his play. Anthony suffered a small left shoulder tear late in the regular season that was revealed during an MRI on Wednesday, a league source confirmed. The Knicks are hopeful Anthony will not need surgery, according to the source, who added the team plans to allow its All-Star to rest for the next three to four weeks in an attempt to allow the injury to heal.
Anthony said Monday that the injury, suffered on April 14 against the Pacers, hampered him throughout the postseason.
"It was bothering me since it happened," said Anthony, who shot 40.9 percent from the floor in 12 postseason games after shooting 45 percent during the regular season.
Ian Begley is a regular contributor to ESPNNewYork.com