If you want to keep the auto, and pull the toy hauler, I would encourage you to get a 47RH to replace the 518. I would also get it built/modified by Georend Bros for towing. The lockup convertor will be much better for towing heavy.

I tow my 7000# flatbed gooseneck with my 93, and have many times put to 6500# trucks on it, and it hauls it just fine. A few pump tweaks, maybe a little larger injectors, and a good trans and you will be in good shape. 1stgen.org is a good place to get recommendations for your diesel upgrades.

Michael