Can I advance the timing on a Toyota 2003 4.7v8

There is a fundamental problem with your explanation. You say that at 2000rpm your timing retards past 0? Your timing should be advancing. Hence the term mechanical advance and vacuum advance. Your base timing should be in the area of 10-15 degrees and with your advance, should end up close to 20 under load. Are you certain that you have an advance issue and not a power issue? A weak coil can cause missfire under load. Or check for a clogged catalytic converter.

Your timings off, its to far advanced

do you mean the silent blocks?there are tree off them left,right,
and below backside.use one off these whit a wooden block on.
tilt engine up just slightly the remove the arm and replce the silent block
engine can tilt little forhttp://www.totalcarparts.com/online-shop/mot1656-autokrik-p-2609.html?osCsid=799e3ca7df3568a036c2e8172feb3c2ewarts so take note.do one at the time .see pic

2 1/2 to 3 quarts, It varies slightly as there are different transmissions used

The timing is only advanced by the computer. There is no way to manually advance the timing.

The timing of the motor is wrong.ie.the spark timing in relation to the pistons.With the knocking,this usually relates to the timing being to far advanced.As the only real adjustment that can be made is the timing,get it retarded slightly.A very simple job with a timing light.The marks on the crankshaft pulley are easier to see with a bit of white chalk on them.Whilst doing this,check the timing auto advance by bringing the revs up and you should see the marks on the pulley move.If so.All is correct.(when you set the timing,the vacuum advance hose has to be removed so as not to give a false reading)I hope this is of help

is your transmission manual or automatic

you will need a timing light, mark the timing marks on the crank pulley and on the timing belt cover with chaulk or white paint.  Connect the timing light.  move the distributor or the crank sensor to align the proper marks and retignten.  You can tell if you are advancing the timing by the increase in engine speed.
Do not advance the timing to beyond the specs or you will have spark knock and burn a hole in a piston 

Sounds like a fluttering fuel pump maybe. that's an interesting problem you have there. water in the tank can do this as well. trash ect....