Venting - Skill Checks and Role Playing vs Roll Playing

[BWR]

Hey, now, I did that with Basic D&D (of BECM) at age 10, and it's a great game.

Ditto (well, age 12, but you get the idea).

The OP's problem I think is one of communication and expectation. A lot of players expect the game to run by the rules presented in the books or at least with house rules presented at character creation. This isn't an unreasonable expectation, to be honest. If the rules say you can, you expect that you can. Yes, there are problems with RAWtards and stupid rules and loopholes and resetting-Wishtraps and whatnot, but most people are fine with ignoring things like that so long as the majority of the rest works as presented. It's when you build a character to do something and the DM on the spot nerfs or invalidates your attempt that you have a right to feel a bit annoyed. I've been on both sides of that and on the receiving end it's very easy to feel that the DM is not acting fairly.
As a DM I try to be upfront about changes to the default rules of the game, and if I change them during the game I try to explain why, perhaps compromise and allow them to either rebuild their character to something more palatable or give them the benefit of the rules then and there and implement the changes later.

So basically if you communicate your problems with the RAW and how you are going to run things - that the Skill DCs are guidelines rather than hard limits, that things like rarity of of monsters/spells/whatever will impact how likely it is they have heard of it, that a unique, never seen before monster has not been written of in any book they've read or spoken of in any story, etc. I think most players will accept this. It's all about being on the same page, about feeling that the DM is treating you fairly.

Edit: regarding Knowledge (local) I think it's a very poorly worded and defined skill. The only sensible way to interpret it as Knowledge (specific area). I treat it like this: You choose one geographical area and can use it as a generic Knowledge for everything in the area: history, denizens and monsters, etiquette, religion, etc. Thus you can have just about as many Knowledges (local) as you want, each applying to a different area, possibly overlapping in some respects.

The exact DC is dependant on size of area, length of history, importance of formal education, contact with rest of the world, frequency of interactions with monsters etc. Using K. (your city) to know how the city was founded will be possible with a lower DC K. (history) check but can be done with K (your city). Likewise K. (your city) can tell you who the leader is and who the local nobles are probably at a lower DC than K. (nobility).