I made my XT8 sit higher that a normal truggy as well. I found that the Ofna Jammin X2 truggy shocks were a much better match than anything xray has as they allowed a higher stance yet had the shock travel needed for jumps. To save a few $$$ on my conversion, I just filled the CD with 120k oil. Here is my setup:
http://scriptasylum.com/bl_conversions/_xt8.html
Note: I now use a Tekin RX8 1700kv truggy motor instead of the Medusa. I would have kept the Medusa, but couldn't gear the pinion low enough for the speeds I wanted.