Well if you're getting that on a 3.8" pulley, you're going to need quite a few more mods. Best bet would be to get a set of headers, go back to stock coils, and get the S/C ported.
My car had 0 knock when I dropped to my 3.4", and now that it's getting cold, i see 1-1.5degrees of knock under full throttle now, with the mods in my sig.
I also wouldn't go with a 160* thermo, read the write-ups about engine longevity vs. colder thermostats.
And if I read that right, it sounds like you're going to put the 3.4" with the engine already knocking, if so, that'd be a bad idea.....
