Nothing wrong with going up. Especially with a 4x4. My second Dakota is a 4x4 with a 3" body lift and 33x12.50/15's. Even though you have a 4x4 and most of the guys are lowered here on the site that doesn't mean there aren't a couple of us jacked guys kicking around.
AMEN to that... if i had a 4x4 then i would go up but since im only pulling with 2 wheels im going down... but if he did lower it wouldnt it be like an awd eclipse or talon??? low to the ground and powerful
An axle flip would net you ~5-6". Crank down the torsion bars for the front. Dont know how much drop you can get in the front without a lot of cutting. Never looked at the front suspension on a 4x4 dakota.