I would think you could install the AAL 2.5" lift, and keep the stock rear shocks, which would limit downtravel, and wouldn't require extending anything.

Once you put on long travel rear shocks, you will then need extensions.

I can see the rear leafs doing the same thing as the 1st gen Xterra.. sack out if you put on a shackle.
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Mike.
06 OFFROAD - Knight Armour