Make sure the K3 (or K3S - they operate the same way) is in DATA A mode. With the K3 in DATA A mode, check that the MIC SEL is set to LINE IN, and check that the MIC gain control is not set to zero (start out with it at, say, LINE 10 or so). Use the WIDTH control to widen the IF filter bandpass from the default 500 Hz to around 3000 Hz. Adjust the radio's LINE OUT level and sound card level controls the same as for other radios, to get an appropriate noise level reading on receive.

To adjust transmit levels, leave the Pwr slider on the right side of the WSJT-X window all the way up and do not use it to adjust output power. Instead, with the audio transmit frequency in the middle of the bandpass (say, around 1600 Hz), set the sound card level controls and K3's MIC gain control so that the K3's ALC meter reads 4 bars with the 5th bar flickering while transmitting. Use the K3's PWR control to set the desired output power. Do not adjust the audio level to control output power, because doing that will not work correctly on Elecraft radios. Just leave the audio gain fixed and adjust the PWR control on the K3.

For the Split Operation setting, Fake It works better for me than Rig (shorter delays when starting a transmission).

73,
Rich VE3KI