Thanks for the support. I have to admit, as I was pulling the walls down, I briefly thought I might be crazy. So thanks for the extra encouragement.
When I got the floor up and got a better look at the axle, I saw that it already has a 4" drop. So, since lowering blocks would drop below the scub line and Z stepping the frame seems a bit much, I guess it'll stay at stock hight.
I have to rip some 2x4 down and then I'll replace the rotten perimiter of the floor structure.
Then I'll have to spend some money on blasting/painting the frame, and new axel and tires.