Hi Agent,
Business conditions change, and all you can do is react to that change and make the best decisions possible based on where you are today. You should always be looking for a better opportunity. None of the options you posted are exclusive: you can look for a new role internally (you have a good story, the role changed with the exit of the sponsor and you would like a new challenge), look for a new role externally, and also show up to work and give 110% in the role you have while those things play themselves out.
If you do get an offer from a competing company, you have to do a cost benefit analysis on the offer. Your biggest expense with that income is taxes. How much of the 400k do you keep? "Downsizing" to a 300k job that you love, won't cost you 100k, it'll cost you somewhere around 65k (closer to 50-55k if you're in CA or NY or other high tax state). Is that worth it to you? Also, your figures of saving 200k a year at this job will require a lot of that to be in taxable accounts, which at your income level, is sending a lot of your earnings out the door.
With respect to your home, did you include property taxes and homeowner's insurance in your expenses after the home is paid off? Many mortgages escrow these, so you have to add that back in to your "nut" of 5k a month. Make sure to include dollars for maintaining the home, I've seen people use a 1% estimate per year. That would add about $800 a month to your expenses. That can vary wildly depending on where you are in the country, though.