I don't get it
 

Okay so about three months ago It seemed like I was getting bad gas mileage (220-250/tank) and sure enough I was getting code 0304 for the knock sensor. It's been cold out and I've been busy so I haven't replaced it yet, and was planning on doing it this weekend. Anyway I noticed today that I was at about 150 miles and my tank was half full. I was shocked. So I checked the ECU and the only code it throws is 0505 which, evidently, means 'No reported failure'

Has anyone ever heard of a knock sensor fixing itself??

Crazy

No.
Take your KS out and see fi it has cracks. If it does, then replace it. I bet you it is bad. The code will come back.

isn't the KS code a ghost code sometimes?

Yes.

...

'ghost code' meaning that the KS isn't actually bad? So would that still explain my bad gas mileage?

Ghost Code means it won't trigger a CEL but it means the KS is bad.

doesnt the cold weather also give you bad gas milage?