For what it's worth I mounted my LS at least 3 inches higher than you have in that pic. I chose to do this to keep the t case high and pointed down 4*. The slope was helpful with keeping the short rear driveshaft angles functional. I also could not see the easy way to route the PS exhaust given the PS front driveshaft, so I routed it forward around the front part of the oil pan to the DS; this created clearance issues with the front diff that required the engine height I chose as well. The AC pump was taken off very early in the test fitting. I don't feel the extra height compromised stability. I had to remove the top Vortec cover cause the hood wouldn't close with it on. There are more details in my build thread if you are interested.

