Yea, 5.3 8spd 3.23. That's the other reason I stopped looking at the bigger lifts/tires. I don't want to re-gear either due to the cost. If I'm going to spend all of that money, I'll just get a 2500. That's the other reason I think this might be a good compromise, because I'd do this 2" lift, stock wheels (20") and only slightly larger tires. I feel like that wouldn't affect towing too much.
I wonder how towing would differ with and without this lift installed. I originally wanted to go with a 4" lift with 33s, but I think 33s look too small with that lift from what I've seen (not to mention a good 4" lift is pricey). With 35s, it would hurt towing too much for me. So, this seems like a good middle ground to me.
Just a thought. Having the muffler cut out and replaced with a straight pipe would be pretty cheap at most muffler shops. You could try it out and if you don’t like it, have a muffler welded in. Not much of a loss in money if you change it later and you get to try it out yourself.