I would steer clear of that old GM diesel. IMHO
as for the would of Gas VS: Diesel for towing....Been there done that. there is none.
I'll save you a few years, as already said find a ford with a 7.3 power stroke or a older dodge with a cummins and you won't be sorry. bye the way the power that diesel trucks can put out will blow the doors of gas engines
I have been towing jeeps, cars, trucks, boats, quads, and trailers over 20 years, here is a list of my encounters. straight six, v6's, 350's, 401, 454,7.3 Power stroke,cummins turbo, 6.0 power stroke and now A Freightliner with a 8.3 cummins.
I have a 1951 willys that I used to flat tow with a 1991 cherokee 4.0, it would do it but it didn't like the hills. then we bought a half ton chevy 350 and put the jeep on a 8x16 tandem trailer, again it did fine, then to the 1999 suburban with a 454 wow nice no need for more power. now I get a 2001 Excursion with a 7.3 power stroke diesel, Holy bat bells I long for nothing else. with this rig when we would go wheeling the only one that could keep up was a buddy with a dodge CTD and 6 speed, all of the gas guys fell behind on the hills and we just kept pulling and pulling. I also picked up a 1976 J-10 with a T-18 and a 401 in it. loved that baby.
I then bought a 2004.5 Dodge 3500 CTD and we joined the toy hauler club (a 43' fifth wheel), then a 2005 F350 towboss and now to the Freightliner. this process is what led me to this site (the toyota side) as I promised my wife that when I bought the big truck I would get a smaller truck to drive for work so I found a T100.
hopefully my ramblings will help.
Rich