Cutting the inner lip on the back wheel wells.

Looks like the spot welds are already right at the edge of the lip. If you cut it back, you'll have to weld the quarters and tubs back together.

You can probably roll it back some, you'll probably have to make some relief cuts because of the double layer. A heat gun will help with the paint cracking, heat as you go and go slow. Of course it may still crack.