There is usually a balance between surgery and medical management of a spinal problem. Currently things are getting worse, albeit slowly. Whether this worsening is due to the inflammation from the stenosis irritating the nerve versus the PT is difficult to tell over the internet. I would think that letting the inflammation calm down a bit, then having the PT would answer your question. If the inflammation calms down and the PT makes it better then you have your answer, and visa-versa.
Surgery is almost always difficult to predict.
Usually it is the last effort, and many times the process or etiology is worsened by the time surgery occurs. So naturally, the outcome is worse. Maybe, it might be a good idea to get a second neuroloigcal opinion. It is my belief that arachnoiditis can flare. Take to your PT and see what they think, because they know you best.