You would not need to do anything with blocks (springs are still in their same spot. I agree, airbags work but a good weight distributing hitch will be more effective especially if you add sway control bars.

 

Since your truck is lifted, im not sure if it will work or not because the u-bolts that hold the brackets to the axle would have to be about 3" longer I would assume. How big of a block do you have in the rear? And no you do not need a compressor for this system. You can run lines to the rear of the truck right next to the hitch and anytime you need to air them up or down just hook up to them with an air compressor.