I really dig those Iceland fenders- I've never seen them before.
As to the low COG build, it obviously makes sense. I had 33's on my TJ before we sold that, with only a 2" budget boost lift and no other mods. It takes much more to fit 33's under an XJ, but mostly because of the sheet metal. Most (that's MOST, not ALL) of the guys on NAXJA that roll on 33's fit them on with a 3.5"+ lift. Only the 3.5 RE lift comes close enough to clearing 33's without much trimming, but not if you're running aftermarket bumpers and other added weight. Most of the others run a 4" or more.
Like I said, it only makes sense, but I never really took it into consideration as I've been thinking about fitting larger rubbers under mine. It would be great to be able to keep my 3" lift and save some dough in the process. I would say, that going with something like a 2-3" OME lift that gives you the stronger coils and leafs would be the way to go. Especially because the stock XJ leafs tend to sag and even warp a bit under normal road usage. A lot of flexing and mild abuse would probably send them over the edge. Keep in mind (if I recall) that the XJ is only rated as a 1/4 ton vehicle from the factory. That's easy to exceed if you're loaded up for a week in the wild.
One of the things I'd be curious about is what amount of back spacing on the wheels would work the best with those Iceland flares. Would you want them to be able to tuck under, or is further out better since you've got to cut sheet metal to mount them anyway?