Bilstein struts help

Your primary problem here is that you have a spring rate issue, and are attempting to use the circlips to compensate for it. You have a steel front bumper + lights. Maybe a winch? I don't think so on that piece, but can't tell for sure.

A lift spring such as an OME 885, 886, etc is built to achieve its lift by way of being a taller spring. If the 887 spring is not providing you any lift (it should be providing approx 2.5" at the bottom setting) on a 2G Tacoma, it's a tell that you're under-sprung. You should still be getting at least some height so that is odd. Lift springs like these should never be installed on anything but the bottom-most circlip setting on a Bilstein 5100. The reason that you're getting a very rough ride on the upper circlip settings is due to the coil binding and completely stopping out the coilover's compression cycle before you make contact with the bumpstops.

The most basic of fixes here would be to move the circlip back down to the #1 position to protect the coil, put on something like a 1" spacer atop your coilover, and extend the bumpstops to prevent collapsing the shock. This is not ideal, but would "work". You'd also need to make some droop tests to make sure that you're not getting coil contact from your upper ball joint. You're kind of in a pickle in the lift height department, and there's not an easy way out.

As far as tire fitment is concerned, here's something to consider - Regardless of lift height, assuming you're getting full bumpstop engagement during the compression stroke, the tire/wheel is in the EXACT same position. What I am getting at is that whether you have a stock height truck, or a 3" lifted truck, you still have to do the same amount of clearance work to make the tires fit during all stages of the suspension cycle. The only time that you don't need to is when the travel gets stopped out early by way of a lengthened shock, coil bind, etc. All I'm getting at is that lift height isn't the golden ticket to fitting a larger tire.