Does Death Knell still proc if the unit is sent back to hand?

No, Deathknell does not trigger if a unit is returned to your hand.

According to Rule 808.1.d:

"The Trigger for this effect is the Permanent being Killed and sent to the Trash."

Because Deathknell requires the unit to be killed and move to the trash, if a card effect causes that unit to be returned to your hand, the "death" event never occurs. Consequently, the Deathknell ability is never triggered.