I'm thinking of trying MM7 with 3 Knights and one Druid. I know it will be extra hard, I just don't know if it can be done?
Any thoughts? Am I deranged?

How much experience do you have? I have heard of even KKKK being possible, so it is doable...

But I recently inquired about a PMDS party, and there I was reminded that D does *not* get GM spells. So, that means you will not have Lloyd's Beacon. It also means no Power Cure and no protection from instant death or eradication (not a GM spell but that protection only comes at the GM level from Protection from Magic). The solution for no instant death/eradication protection is most conveniently addressed by using Lloyd's Beacon, which you will also not have.

I also think it will be tough to allocate the Druid skill points, with 7 magic schools to cover...and no light/dark.

Put all of that together, and I think KKKS or KKKC would still be 1 caster but would be easier than KKKD. Then you get light/dark, and you get GM in 3-4 schools. You will miss out on the other schools, but in particular I think KKKS would be easier because many of the things you need from C you could brew as potions (though not all of course...not Prot from Magic in particular, but you would have Lloyd's Beacon at least so you can get back to a Temple!)

All of that said, if you are quite well versed in the game, it probably is possible. It may get very annoying at the end but it is possible.

In addition to that, even Town Portal - a Master level spell - requires GM level in order to work when hostiles are near, so you would not be able to teleport out of a deadly battle. You would have to get away from the hostiles before you could use it, so TP is also not a solution for the D.

If you are familiar with the game using a KKKK party is a ton of fun. I did a play through around a year ago and had a blast. Vampiric weapons can make knights almost invincible in the late game. As for having no magic I would use hirelings for town portal and fly and maybe the odd scroll or potion if it was a good spell.

Did it in MM7 A blast. Whomping everything. But as an earlier poster mentions. Get to know the game first.
(Edit for correct game)

Yes, it is entirely doable.

The only GM spell from Self/Elemental that particularly matters for this party is Lloyd's Beacon. GM Protection From Magic, Invisibility, and Enchant Item would be nice, but work with what you've got. Everything else is more or less replaceable.

-Inferno is just single target damage.
-Star Burst is a slightly better Meteor Shower.
-Mass Distortion isn't needed.
-Power Cure isn't really needed, especially if you can lay hands on some vampiric weapons for all your knights; the druid can get a full heal via Shared Life while the knights leech HP off enemies.
-Enslave doesn't even work half the time.
-You can Town Portal away if someone (except your druid) gets Eradicated. If monsters are in range, then just run out of range. Don't try to run past monsters, and the TP restriction shouldn't be an issue.

Carry some extra black potions, some potions to cure status ailments on the Druid, and a few Raise Dead scrolls, and you're golden.