Please measure from the center of the axle hub to the bottom of the flares front and rear. Post the measurements info here. That will give everyone an idea of how much lift you have.From what I have learned (thanks to you guys!), front sway bar needs to be dropped, castor correction might be needed and the rear drive shaft should be rephased. Does this also require the DC driveshaft to be installed and should I look into aftermarket control arms?
Also, it seems like the cause of the grinding noise could be the transfer case instead of driveshaft since it only occurs above 60 mph and varies with throttle input.