I am glad you made this post. I too have the Fabtech 3.5" lift with the military wrap springs, 33x12.50's and trac bars & sway bar removed. I took it on a little ride on Friday and tried to pull up on a small rock (maybe 12" tall) and before I got on top the rear tire lifted. I also contacted VACJ5 yesterday to get some new shackles.
So it seems the opinion is to go with 5/8" lift, I was originally intending on stock length, but if the 5/8" will help then thats where I want to be.
It seems we are both trying to tackle the same issue from opposite sides of the country, 2 minds are better than 1 so hopefully we can get our problem fixed.