Thanks for the input everyone.
By shortening the shackle, I realize I also need to be concerned with both lateral and vertical spring movement. I will first go to Dexter to see if they have a paper on the spring travel. The spring travel cant be much on such a small trailer as the 154BH...the tire has 2" of clearance all the way around the wheel well as delivered. The spring has 3" of arch under trail weight.
I will keep you posted