i know on my 98 (same shit different year) i had my keys cranked all the way up and NO rear aftermarket shackle, and Yes, the blocks in the rear are stock on the 4x4 base.. i ran 32x11.5 for ever no problem with stock gearing (5speed with 3.73) i had absolutely no issues at all.
Then i put on my buddies 33x12.50’s for a test fit and beach trip i noticed that i could not get full turn lock, but just barely, and i had plenty of room, NOTING that on my stock ifs up front it was like 1 1/2” up travel and 2” down travel MAX.
if i was you, seeing as body lifts are illegal for you, and that any sort of ifs lift package is 1400 green backs, look into some bushwacker cutout fender flares, they run approximately 500 and cut your fender wells and install those, youll be able to clear no problem, but seeing as you are gunna run a tall and skinny tire the worst you may end up with is some inner fender rub, ant they fit b/c you have an extra 2” of hidden clearance behind the outside sheet metal of your fender (if they can completely tuck inside)
Or look at last months 4x4 of the month (red devil) he did a fender trim and those cheap (100ish) self molding fender flares that you can buy off this site in the parts location. trim what you need and slap those on and nobody but you will know!