I have my data manually backed up on other media, so should I just wipe this HD clean and start from scratch?
If you don't think you'll ever have to go back to retrieve an older item yes.
You may be able to free up space on TM by entering Time Machine from the TM Menu and deleting all backups of big files. For me it's Parallels virtual machine for one. When ever I launch Parallels it changes the Windows VM so TM copies the whole thing again, 30 G.
If you use Toast you may have a lot of Roxio Converted Items folder backed up, it just holds temp files.