Mine has stock springs (aparently new, too), and the fender is a good 4" above the 235 tire. Mom's got new springs recently (tire was inside the fender), but I havent really looked at it closely. QALmost enough I could go to 19. 5s but not quite. Cornering might be difficult.
New springs, good shocks of your choice, and you should do ok with 265-75 16s. Little wider than stock, but close to the same height.
Daniel