ZappBranigan, I am doing a similar project. I am using an 84 Honda Nighthawk. It is a great low mileage, well maintained bike. I just couldn't get excited about the 80's styling. I thought with a little work it could be more of a UJM or scrambler style bike. Like yours, it is also shaft drive. I removed the rear shocks and starting jacking up the bike with a floor jack while spinning the rear wheel. At about 4 inches over stock the u-joint started to clunk. I settled on lifting it two inches in the rear. I was looking for some two inch over shocks, but couldn't find any I liked. The stock shocks were really nice and had lots of adjustments, so I kept them and relocated the stock upper mounts two inches lower on the frame. I am looking for some more aggressive tires. Other than that, it will be mostly cosmetic changes. I will post some pics soon.
Good luck with your project! I can't wait to see it.