Been there with bilateral TKR's. My first was service connected, I was young at 53. I was a nurse. My civilian ortho Doc stated its all about quality of life, so he did mine, 2 yrs later i had the second done. I was awarded SC for the 2nd thru CAVC remand. If you get your care all thru VA then, then yes they are going to deny it. I went the civilian route and had no issues with my pay or increase in ratings. Reality, if you have civilian insurance as the local vets told you have it done then file for your permanent increase to 30%. Don't live in pain and loss of quality of life. As far as VA paying for it, i think they gave you your answer whether locally or 200 miles away they're not going to do it till 60. They will also pay you 1 year at 100% for convalescent pay. If you have chronic residuals of moderate to severe pain , loss of range of motion after the 1 year per as they will do a follow up c&p you could go to 60%... Others may chime in on eligibility on your circumstances. The moral of this is do what you need to do to work around the VA bureaucracy to take care of yourself and collect the benefits due you. The convalescent pay isn't immediate if civilian and prepare yourself for 4-6 months till your paid once you file. When your surgery is completed get your surgical report of operation and file for your pay.
PS: Having a bad knee, if you have or develop problems with your back / hips / opposite knee, depression due to chronic pain etc , be meticuous in documentation and getting treatment to establish history / paper trail for possible SC down the road ;)