First and foremost, I am so very sorry for your loss.
Honestly, it is a deeply personal experience that only you can make.
There are some pro's and con's to each option, although I've had both a natural miscarriage, and a D&C, but have not done the oral medication. With a natural miscarriage, there are a lot of uncertainties. You don't know when it will begin, or what to expect from your body, or how long it will take... You also don't know if you'll miscarry completely, or end up needing a D&C anyway to avoid infection. With a D&C, it is over immediately, and you can focus on healing physically and emotionally right away. However, this is an issue for some women, and they would rather work through the miscarriage in the privacy of their own home, as naturally as possible. D&C does pose a risk of some scarring in your uterus and the possibility of developing pelvic adhesions, although the risk is low with one procedure, and not terribly likely. It's a very simple outpatient procedure that you won't remember, with little discomfort (other than the need to rest, and to take it easy for a day or two) afterwards.
I honestly don't know much about the pill.
Whatever you decide, we're here for you. And again, I'm very sorry for your loss. Miscarriage is one of the toughest things I've experienced, but after having 2 consecutive losses...
If you are planning on trying again in the future, know that the vast majority of women who have had a miscarriage can go on to have future successful pregnancies. I know you wanted THIS baby...it's so difficult. But I want to tell you that there is a lot of hope for you in your journey, if that is what you're planning to pursue.