looks like the spring is bent/curved. You'll need to replace it or spin it to line up with the rear suspension's arc/range of motion.
Put the rear up on jackstands so that the rear end can hang, remove the rear wheels, put on some work gloves. Even with a 4" lift, I think you should be able to just grab the spring, and twist it 90 degrees or so to get it into a better position. If not, then jacking up the other end of the axle will drop the problem side enough to do the above.
'98 TJ Sport