This is a pun using the phrase "still of the knight". The men found the moonshine whiskey operation in the evening, which suggests that "still of the knight" refers to "still of the night".  "Still of the night" means late at night when it is quiet and dark. "Night" sounds like "knight". Sir Lancelot is a knight. A "still" is a device used to distill alcohol, which moonshine whiskey is an example of. So when they say the men "shattered the still of the knight" they mean that not only did their activities disturb the quietness of the night, but they also destroyed the distillation device the knight Sir Lancelot uses to make moonshine whiskey.
One evening King Arthur ' s men discovered Sir Lancelot ' s moonshine whiskey operation and shattered the still of the knight .