Yes, the loss from the sale of the rental would offset any other income, including a Roth conversion.
The sale of a rental is not subject to the $3000 limitation. The loss is fully deductible in the year that it is sold.
Regular rental expense losses would also be fully deductible against other income (at least they will be in the year of the sale). However, it is a bit unclear how you need to deal with the 'repairs' of the damage. If the property was not longer available for rent, they would not be deductible 'repairs'. However, you may have made some "improvements" that would increase the basis of the home.
