I voted the third. It seemed obvious. Make a large tax free gain and move in debt free. That's probably why it's (as of this writing 0-0-6). Can you make a case for one of the other options being better?
I'm guessing the vote count is so low, and here's no responses in thread because you gave us very little information beyond the barebones financial, nothing based on your needs or the property, or whatever. But if you can sell your current home for more money, move in, and pocket the difference, and they're both equally satisfactory living conditions, why not sell the one worth more and invest it?