I disagree with the decision to castle.  Destroying the Knight is a stronger move.  White can't win two pawns because after dxc3 Qxg7, Rg8 (forces Qh6) and suddenly white is not only down material but positionally hopeless as well.  Black goes on to win easily after that.

I agree with AMcHarg: ...dxc3, Qxg7 Rg8, Qh6 cxb2, Rd1(Rb1 and you're up a Knight and a tempo for a pawn) Qe7 and it doesn't look like he'll be able to get anything from the bind as your rook is out (Rg6 is coming if his Queen sticks around) and all your pieces are available for Defense of the King. Plus he'll still have to watch your pawn on b2.

Yes, taking the knight has no penalties because:

1) Only gets one pawn

2) Your loss of castling is not a big deal after you force a queen trade as such: