Yeah, that's bad. In stock ride hight-form, you end up with around a 4" gap between the tire top and the fender opening (if I am guessing correctly-I'm pretty sure it is around there). I would be scared to even think about what driving that beast would be like.
If this problem is in the rear you could replace only the rear springs since it is relatively easy to do, and not much more work to do the shocks later. Of course if you want or need the rear shocks go ahead and do it together.
Of course if you need this in the front, best to do these together.
I think somewhere in the archives someone listed a sourse for performance springs that add about 3/4" hight and are a bit stiffer for about $45 each. Good luck, let know the results.