curse of hungry backpack

[LT424]

our group disagrees greatly on how the curse works, if you are cursed with the hungry backpack and you are in combat, after winning combat and drawing your treasure cards can you discard items for gold to go up a level before rolling the die for the curse? my understanding of the card is after you draw your treasure you can play any cards in hand that are playable but then you immediately roll the die to see how many cards you will have to lose. sorry if this question has already been answered. we searched the forum and couldn't find the answer for this. a complete list of rules of how this card works would be wonderful, thanks in advance. MUNCHKIN RULEs!