I assumed that you had a SBC. I also have a 5.3 with an F body pan. I was able to lower it 2.5 inches after I notched the crossmember. Here is a pic of it. I ended changing out the motor mounts for some bolt in ones I made.
The centerlink becomes an issue and you need to recess the engine about 3 inches to have the centerlink land right between the pan and the balancer. Then packaging the exhaust gets tough as you land right between the frame rails where the exhaust needs to be.
With the 1.5 inch sectioned crossmember you will not really have to worry about the frame. The LCA is what will hit first. You wont need to lower the engine with this method though. Assuming you have the fab skills to do a Z or crossmember section, why not do the 1.5'' crossmember section and fab up some mounts for a rack and pinion? No tunnel issues, no bumpsteer issues, no lowering the engine, etc.