Get it fixed and find a 2500 Suburban. I tow our TT in the signature with ours and with a few small mods it tows great. I don't know what our trailer weighs but I have 7 people (granted some are halflings) and my Suburban rides on 33" tires with 3.73 gearing. It still tows very well. I lock out 6th in tow/haul and let 'er go.
So yes, there obviously is an issue with the engine in your Denali. If it was spark knocking the ECM should have pulled timing. Sounds like it was an oil pressure issue which is infinitely worse and more likely rod knock you were hearing or even a clogged oil passage causing bad lifter knocking. Do you know what the code was?
IMHO, the 2500 is just a more comfortable tow vehicle. It handles the heavier loads better, the engine is built for towing and the 6L90E is stronger. The platform is built and tuned for towing. My wife daily drives ours. We had an '07 Suburban 1500 with 5.3L in the past and she prefers the 2500. They aren't impossible to find but they are worth their weight in gold, i.e. they hold their value very well.
