Honestly, I'd probably go with 31's and go with TJ flares with some liberal fender cutting. The flares will hide the cutting. This should give you enough room for 31's. If you really wanted a bit more room, then go with .5"-3/4" shackles and maybe a 1" body lift. It should keep cost down while not screwing up any of your steering geometry. (ie., camber) It will not require any modifications to the transfer case nor will it require a pitman arm. Then get some swaybar disconnects and remove the trackbars. Relocate the front brakelines, which allows for more drop (this is free and there is a post on it.)