I thought I'd share what I did in just under 2 hours
with these tools:

Inner fenders removed...

First cut

I used the plyers to fold the lip straight

I cut in as far as the seam sealer

Then folded the 2 pinch welded pieces of metal back(but at the firewall)

The plyers got it to the point where I could use the hammer

Self explanitory...

I then folded that piece up and even with the other pieces, then cut a triangle piece off the bottom of the fender, and made a new lip with the plyers, and the hammer

The finished product

And an inside shot

Inner fenders re-installed, and the tires straight. There's a good 2.5" between the tire and the inner fender. My current worn tires measure 28" exact, and I'm mounting used 31-10.5's which measure 30.5", that's just under 1.5" more in radius, plus some extra width. I've already mocked up a jig on a piece of cardboard that fit around the tire to check for clearance. The tightest spot was .75", and I'm not worried about that for street driving, I'm mounting the tires in the next couple days, so we'll see what happens!

I have about 2" of lift with coil spacers, and 15"x7" wheels. I'm going to be able to run a 31" tire for street driving, and very mild wheeling. I have a 2" body lift I bought from Sky Manufacturing(not installed yet), that will help for heavier wheeling, but I wanted to do this first to show that it doesn't take much cutting to clear the tire with the right rim, and you don't have to sacrafice the outer fender if you're like me.