rspeers,
Welcome aboard! I lowered the rear end of my truck a few months ago, and have a few words of wisdom that may help you out a little.
First off, the factory spacers on my '01. 5 4x4 were 4. 875 inches tall, not 4 inches. I'm pretty sure all year models are the same. I have read that the TSB lowering kit contains spacers that are 2 inches shorter, or 2. 875 inches tall.
The reason I mention this is that I am pretty sure that 2 inch spacers will make your truck a little too low in the rear.
If the search feature is working, do a search on a guy with the TDR handle JumboJet. He built some home made 2. 5 inch spacers, and posted some good photos of this setup a few months ago. His post also contained some sketches of the homebuilt blocks. If the search feature is still down, you should be able to find his post in the towing/hauling section if you "hand search" the posts from around 2 - 3 months ago.
I made up some 2. 5 inch blocks per JumboJet's design. Jumbo also installed some . 5 inch blocks under his overload springs to make them engage sooner, I made up some . 5 inch blocks, but have not decided whether or not to install them. I have not towed since lowering the truck. I'll install the . 5 inch blocks if the trailer tounge weight makes the truck squat down too much.
Your shocks should be fine, After I installed my 2. 5 inch blocks, I unbolted one of my shocks and compressed it by hand to see how much travel remained. I didn't measure the travel, but it appears to be adequate, not quite enough shock travel to allow the axle to bottom out on the rubber bumper before bottoming the shock, but close.
As JumboJet's photos show, 2. 5 inch blocks make the truck sit almost level when empty. I have been very pleased with the results of my lowering operation, I know I'm in the minority here, but I like the looks of the lowered/leveled truck. No matter what your opinoin on the looks, no one can deny the truck is much more usable without the tail gate height dam near 4 feet off the ground. I didn't measure how much the tailgate height changed, but since it's cantalevered a couple of feet aft of the axle, the 2. 375 inch difference in spacer thickness translates to a much greater drop in the height of the gate. My wife loves it, she is 5'5", and had a h@ll of a time loading anything into the bed before I installed the new blocks. Even though I'm 6'3", I really appreciate not having to lift cargo a mile off the ground to get it into the bed.
Making up a homemade lowering kit fairly inexpensive ($60 for blocks, & $36 for u-bolts in my case). It is also a breeze to install... probably takes about an hour working at a liesurely pace, however, before you do it, check with your dealer. Some guys have reported getting the factory kit installed at no cost, I guess it depends on the dealer. I didn't even inquire because at the time I did mine, I was not aware that some dealers were doing the lowering TSB for free, it never hurts to ask... may be able to save 100 bucks or so. Good luck!