You most definitely do not need a 3.8-4.0 to be competitive, unless you really like Harvard for some reason.
It sounds like you have plenty of time to raise your GPA. So the first thing you should do is either improve your study habits or get help from tutors/study groups to do better academically and you should be able to reach a GPA of 3.5 or so. Also don't forget GPA isn't everything, your DAT is arguably slightly more important than your GPA. If you finish undergrad with a 3.4, but you are able to pull off an amazing score on the DAT, 21+AA and TS, you would be in the clear.
So I'd suggest just doing as amazing as you can for your last two years and give yourself plenty of time to study for the DAT so you can get a great score. I don't think you'll need to take a gap year unless you graduate with <3.4 and don't do well on the DAT <19.
Just my two cents.
Best of luck!