I had the same problem, decided that I liked the lines and the space for kids So I bobed the bed 12 inches instead
If I were going to tube out the rear I would cut here with an angle cut to the front
tube inners and run the scout outers as skins. I think the best place (looks the best) to cut is about 6" behind the top of the wheel arch. If I were doing it though I would run coils and a four link, might as well get a good departure angle.
I personally don't like the flat bed look, you can shave a lot of weight and keep the 16 gauge rear quarters as skins, you'll get fewer UHP encounters as well.
What finally decided it for me was the idea that if I could fit wife and kids I will get out more often. Plus I really dig the fugly scout lines. All I have left is the new wheel wells going in tomorrow. If you want to stop by and look at mine before you sawzall, feel free.