I remember seeing were someone put a 3" on a 2nd gen diesel. The intercooler moves up with the body and u get a 3" spacer for the intake elbow on the drivers side. Can't remember all the details about the install.
I have had body lifts a few rigs of my own and helped install numerous others. If done right and use a quality kit that addresses the major issues, a body lift is not a bad mod at all. Some say u are moving your cog higher, but u are actually keeping it lower than a suspension lift would. I remember the picture i saw of the 2nd gen with the body lift and it really wasn't noticable at all. Keep looking around u will find what u need.
Actually it would probably be about as cheap to upgrade to a long arm kit and install spacers in your suspension for the extra lift.