Place a jack under the lower control arm and jack it up. Place pressure in the bag. and check clearance. Go from 100 psi down to 0 psi and if it clears then you've done enough. Its always nice to leave about a 1/4-1/2" worth of room around the bag.
When I had my truck bagged, I didn't need shocks, It rode fine. Check out the ride without the shocks and if you do not like it install some shocks. You weld on a mount for the top of the shock and you drill a hole in the lower control arm for the bottom of the shock.
You cut out enough on that side now you should cut out the other side where there is a lip
i am from cali, i ran wihtout shocks for like 3 weeks due to not having the time to weld my relocators on while i was in socal. this past week i had clint at sic motorsports install em for me and lemme tell ya it is much nicer a ride, and sure you loose some turning radius but whne dirivin slammed(like i do alot) you don't have to worry about the bouncy ride, i can still set the truck on it's nuts and they haven't slowed or inhibted my lift in anyway(then again i only have ridepro valves which are't crazy fast valves) hope things work ok.
The whole lip in the back
I had my truck a little over an 2" off the ground and my truck rode fine without shocks, just like hipoblaze said you do lose some turning radius. But everyone has their own opinion. If you like it you like if you don't you don't.
this is the bag with air in it between 40 to 100 and it seems to have about 1" of clearence in the rear where that lip is... from 0to100 i still have room. ill think i might still grind it a little but the only thing that is close is the pocket on the left of the pic i need to trim about 1/4" off
hey bro, you should easily com within 1/2" or less form laying that fornt crossmember down. i need to trim more outta the rear of my spring pocket near the rear cuase it is contacting the lower control arm hump when completely aired out. here is a little story i posted on another forum about scraping. btw what year is your truck again? i have a 92 s10 blazer with the exact same fornt bag kit as you.
here is my scrape story form last night ok so i was chillin over at my frineds house with a bunhc of guys and well it was late and we were hungry, so we headed to denny's. as we make the turn off of his street i decided what the hell i'll lay it down it was an empty street and the guy's behind me were expecting me to. so i do and throw some nice sparks then i saw a double row of orange road dots and veered over near them. i was booking and just poppin em off left and right. sometime yesterday i managed to bust the little scrap plate here off and couldn't find it today when i went to look. howeevr i saw a shiotload of road reflectors all over the street probaly a good 20 or 30 so i grabed a few of em and took off. oh well i guess it is just an excuse to weld a beefey new scrape plate/drag blocks to the truck for masive light shows.