Unfortunately I designed the frame around 24x3.0 Kenda Kraze tires which are the same height as standard 26" tires. When I bought the Sturmey 8 speed hub I assumed you could put a dished spocket on like an older SA, but of coz you can't as the shifter works the same as a Nexus so it's in the way of the sprocket. The rear suspension could easily be readjusted to be higher but the front can't be changed which would result in the bottom frame tube no longer being parallel with the ground. I could just put 26" wheels on the bike but then I'd lose the look of the 2" rims.
You're right though, I won't be able to use the air ride for anything other than parking. I plan to go ahead and finish the bike as is, perhaps try to find a taller 24x2.35 tire. I may build another frame down the road and switch the components over. The bike is okay to ride on the road but sharp corners, speed bumps and driveway entrances are a bit tricky.
I don't know if you noticed, I used a piece of black nylon air line slipped over the air cyl shaft which works really well. I have discovered the air cyl leakdown you refered to, I'm suspecting it's because we both used dual acting cyls which are meant to push/pull, but we have only hooked up one side. I believe a single action cyl may fix this problem. What did you use to convert from the air tank thread to the fitting for your switch? I've got my eye on an ebay tank, but of course will need some sort of adapter.