Just wanted to make a note for those looking:
265/70/16 Michelin LTX M/S2 tires on my 2006 LS 4.2 4x4 with NO modifications.
They fit and I've had no problems, however there is evidence of microscopic rubbing on that upper ball joint. Clearance is probably about 1/4". I've put about 10,000 miles on these tires so far in hot and cold weather, on and off road, have taken them up to 108mph, and have had no issues. Love these tires. I'm pretty sure they're the widest & tallest tire possible on this 16" wheel without modifications.
Alright, later in the life of these tires I am not so convinced that they're a good application for the truck.
Biggest problem: too wide for snow applications. Although they wick away water with ease, snow is dangerous. The truck is too light to push these 265 highway tires deep into the snow, so they just float on top and I slide through intersections in town like nobody's business. I will move to a more aggressive tire that is also a 245 or 255 for the next set (before this winter!!).
Second problem: too tall for my 3.42 gears. Although I've gotten up to 25mpg on a 1 hour highway trip (with minimal city driving), the gear/tire combo makes the lower speeds & towing annoying. The truck lacks torque at low rpms, which is where you need it. This is mostly due to the gears being 3.42, and with 3.73 the tire height would not matter nearly as much.
Basically I've noticed that the stock size tires are the RIGHT SIZE when it comes to the 3.42 rear gear and snowy weather.
Otherwise I'm happy with the wear on these michelins. I think I put them on around 112,000 and I'm at 146,000. They hardly look worn and should easily live up to their 70,000 mile warranty or longer.