The issue you describe sounds exactly like the problem I was having. The 4" shock extenders I listed above are only $40 on ebay and can be returned within 30 days if they don't work out. I would highly recommend trying them. I'm guessing you already have 2" shock extenders on your Denali. Make sure these look like the ones you already have since they are listed as being for 2000-2006 model years (even though they fit on my 2007).
Maxtrac also sells a 4" shock extender: https://www.amazon.com/MaxTrac-401004-Shock-Extender-Coils/dp/B08CHZ34L1/ref=sr_1_5?crid=2FH3CMWY8B0J4&dib=eyJ2IjoiMSJ9.Cyd8z-pD_aqEBKHs1Da6FOUUm-LVPKi_m9rKFBjiGDgr7F-uCRfpNPvS5V1fFWHynKmekzZTsfgGsbxgIyNapsokAIvUT-ma3wewYGf6R3AKbkcK0UH2KGJ6NByw8y4FD_ilEnPZ6Z0s7CP7ZTEccnk-M-7m76BIlaRI__G4LIGmlzUOY7yPbZZkAzAhqBBdpdI7xRczmdMxzu0f6qKLzNqg4bwXxWFCksJKXbvVkck.IOVnptz8FEQkkmE14P_zYx7T4EDG7uWOHOzHNp691GM&dib_tag=se&keywords=4"+shock+extender&qid=1724429900&sprefix=4+shock+extender,aps,137&sr=8-5
You could also buy a 1" spacer to bring your rear up: https://www.amazon.com/Takeo-Leveli...-2676-104-&vehicleName=2007+Cadillac+Escalade
