Smaller Tires or Shackle Flip?

[cpavelko]

Hello,
Just wanted to get some peoples opinion on this from experience on what would be better. I currently have 35x12.5x15" tires with a 4" block lift on the back of my Blazer. The tires are positioned too far to the front due to the lift. I'd like to do the classic shackle flip but would that buy me any clearance wit hthe tires I have? If I just go with smaller tires for now such as 31's or 32's, would that allow me to have more clearance? Should I look into cutting the rear wheel well to allow better clearance? Just looking to make the truck functional when taking it on some simple trails. I don't need a ton of clearance so downsizing the tires wouldn't hurt me there.

Here is a pic of my buddy acting like a dork in the Blazer but you can see the clearance issue.