safeershah
I'd hazard a guess, but it seems that your engine has suffered a serious bout of pinging or knocking. A couple of question for you:
What compression is the engine running?
Does it have an unleaded conversion done to it? Valve seats basically.
What fuel octane were you running in it?
Any idea of the spark timing that you were running?
Mixture settings?
About your question about the gearbox. I'd probably keep the automatic and pair it with another torque convertor to get more punch "out of the hole". Plus you won't have to heft the clutch for long times in daily traffic. You can rebuild your torqueflite with new brakelinings and such as well. It's probably the strongest gearbox available this side of Allison truck gearboxes, and I'm not too sure about the manual. The manual's a four-speed right?
After that, it's up to you. Oh and an auto is easier to launch. You won't kill your clutch with every launch.