I had 5.5" coils on my MJ with the stock pitman arm, and no binding. Same steering setup as yours.
A 1" drop over stock is about the largest drop practical. A stock ZJ pitman arm is about 1" drop over stock XJ/MJ.
The problem with dropping the pitman arm is that the draglink is no longer parallel with the track bar, which often creates bumpsteer. The draglink and track bar should remain parallel for proper steering and handling.