why not "je pourrais le faire"?
I guess you are right, if you 'read it' as conditional rather than imperfect, for practicing which the lesson has been put together. The English equivalent would be better expressed by ' I knew how to do it', je crois :)
I think the literal translation of 'I know how to do it' implies 'so I could do it because I know how to'.
in english this can also mean i would be able to do it
Does anyone know why "Je le pouvais" doesn't work here?
Probably because it is 'could do' it, not just 'I could'.