What you are seeing is caster lift. That is different than seeing just the frame lift, in your case the entire truck moves due to the caster of the front wheels. One side will go up while the other side goes down or remains motionless. It is the tires pushing the entire truck, including the axle housing up. The caster makes the rolling components return to center when moving.
And Firebane you are right, the drag link does not
have to be exactly parallel to the ground. The closer it is though, the better the truck handles, despite whatever size lift is on it. The truck is designed to have a level drag link (within limits of course). But get to the point of out-of-level, where it starts pushing the body of the truck, and there are going to be steering problems such as bump-steer, reduced turning radius, and increased wear on the link ends. And suggesting a bent drag link would be a fix (although legal for some reason) is not a responsible answer. It is a fantasy patch to get the truck from point a to point b.
So, actually, the really correct answer is not that the
drag link needs to be parallel to the ground, but the
pitman arm mounting hole end and the
steering arm mounting hole end have to be as level with each other as possible in order to attain the absolute best out of the available steering geometry.
Think of it this way... as the angle of attack increases, the torque required to attack is also increased, this requires something to give. Since the steering box is connected to the frame, and the resistance to turning is part of what the tires do normally, the easiest route for the torque to dissipate is through lifting the truck when turning left (or pulling it down if turning right).
So when a vehicle that uses caster to bring the wheels straight after a turn (all GM trucks with solid fronts to my knowledge) the combination of caster and camber will cause one side or the other to lift when sitting still, when driving this not as noticeable because the forces acting on the tires causes them to roll over so the tread is as close to flat on the pavement as possible. Otherwise the truck would be riding on the outside or inside edges of the tire during turns.
Although this does not seem to make sense, because both ends of the axle should have a equal caster angle that should mean it would lift the truck evenly during a turn in both directions, however, I have not found that to be true. Regardless, YMMV.
I had six +/- inches of lift, with ten inch wide rims using 15-15/39 tires, a lifted steering arm and dropped pitman arm on a Dana 44. That left my drag link within a quarter inch of being level on level ground (simply from memory mind you) I had no problems driving the truck with no hands on the steering wheel, or at high speeds. I could turn the wheels until they touched the drag link/pitman arm connection in a left turn and rubbed on (something, probably the rear of the right spring) in a right turn.
Anyway...
I found this to illustrate-
Caster – Negative and Positive
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Caster is the measure of how far forward or behind the steering axis is to the vertical axis, viewed from the side. An example of caster in action is the front wheels on a shopping cart. They run a large amount of positive caster to make the cart track straight without wandering. However, the method that the cart uses (displacement caster) is different than how your car develops it’s caster angle (angled pivot), but the effect is the same.
Positive Caster
Positive caster is when the steering axis is “in front of” the vertical. In a road car, this would mean that the top of the coil-over would be pushed towards the rear of the car. Positive caster creates a lot of align torque (the force that straightens the steering wheel when you go forward) which improves straight line stability of the car. Due to the geometry of positive caster it also will increase negative camber gain (a good thing) when turning. As you increase positive caster the steering will get heavier also, but with modern power steering systems this is rarely a problem. Generally you want as much positive caster as you can reasonably get so long as the car is equipped with power steering.
Negative Caster
Negative caster is when the steering axis is “behind” the vertical. This is generally only found on older vehicles due to tire technology, chassis dynamics, and other reasons. Modern vehicles do not use negative caster. It will lighten the steering effort but also increases the tendency for the car to wander down the road.
Special Note – Regardless of what caster setting you use, make sure that your caster is symmetrical. Running a different amount of caster on one side will cause the car to pull towards the side with less caster.
http://www.vikingspeedshop.com/suspension-101-camber-caster-and-toe/