Did a 3" lift on my last D2. coils, shocks and only needed rear extended break lines.
The truck was a true champion. Nothing else needed.

I will ad that regardless of what lift you do, the Watt linkage sucks offroad and will fail if you are doing any type of serious articulating. So it doesn't matter if it's 1" or 3" I'd eventually replace the Watts with a rear panhard but you can run it until it fails.
Even when it fails, it'll still work, you'll just have a nice clunking sound even time you take a corner.

At least this is what happened to me.