swartllk brings up some good points! steering will need to be addressed, and he is right about the driveshaft angles they would be / \ looking ... but can be done. brake lines might need to be lengthed also. in my opionin, 6" suspension is about max "budget wise" on a K5... but i have seen 12" lifts on them with 3" body lifts too, and there huge. but to go that high its not as practical. not to mention normally something that high will have huge rubber underneath it. and huge rubber and 1/2 ton axles dont normally go hand and hand. seeing you have 38" already im hoping your running atleast 3/4ton if not 1 ton axles already.
and if you do decide to go for the 8" suspension post some pics on here!! theres not alot of K5 images with the larger lifts here!!!
hope this helps