This is at ride height. With the drag link mounted at the top of the high steer arm, it's almost hitting the oil pan at ride height. With any suspension compression, it will hit the oil pan hard.
I dug through my giant box-o-parts, and came up with a pitman arm with less drop. It could be a stock XJ or YJ, or TJ. I'm not really sure which of my many previous vehicles it came from before it ended up in the box-o-parts. I reamed it from the bottom. The old pitman arm was lower, but reamed from the top, so even though this one is higher, the drag link will be lower. I took out the coilover springs and dropped the front suspension all the way down to full compression. This pitman arm, reamed from the bottom, is perfect! The drag link doesn't hit the oil pan or frame at full compression.