Returning to racing after a hiatus

Welcome back! 

I'm not a coach, so apply suitable judgement and second opinions from more qualified sources. 

First of all (and this is a message I should embrace myself), FORGET what you "used to do." 

When you say "hurts" is that like swollen?  Within the knee joint (like bone-on-bone)?  Inflamed tendons?  It's possible you've got something like water on the knee that the walking is aggravating. 

Walking *shouldn't* be hard on your knee.  How fresh are your shoes?  Is the walking stressing an old knee injury? 
I'd say have someone look at your gait to see if there is anything about *how* you are walking that is stressing your knee. 

How about biking?  While biking isn't overly helpful for running a 5K, exercise is exercise and it can be good to simply do something for 15-30 minutes so that you've already carved out that time when you can walk more or even start running.  You might also do some exercises to increase knee flexibility and strengthen surrounding muscles.