Bill,
Yes, the coil spacers would allow the use of the 32's, but you may still get some rubbing inside the wheel well and when turning.
Our TJ is stock, with 93K on the odometer, and it's been wheeled since it had 126 miles on it (6 miles from the factory and 55 miles home, then "road testing"). We custom ordered it in early '96, and it's 5th birthday is on Sept 30 (it took over 4 months to build it), when it comes off warranty. We have the 8" rims as well, and those are 31's on it, but I can't remember if they were the BFG MT or AT, we have run both. I think the water crossing was with the MT's and the other was with the AT's. We wore out a new set of MT's in about 63K, not bad considering we're not easy on it.
One more thing to consider, the 32x11.5 won't fit on the spare tire rack. The 31's just barely fit, and when new there is no clearance under the 3rd brake light. You will also have to remove the side bump stops on the tailgate for it to fit.
What else has been done to our TJ? I made a set of custom rock rails out of 0.145" wall pipe that's 1.5" in diameter, after ripping the stock steps off on a club run (popped them both 5' into the air at the same time on an obstacle, I thought it was hilarious, the wife didn't). The rails have survived numerous hits and even a 30 mph crash onto a stone wall a few years ago. I made the hi-lift rack on the front out of stopsign channel, added front and rear tow hooks, swaybar disconnects, CB and antenna, modified soft doors from my Scrambler for summer, and the mirror relocation brackets to run doorless. Otherwise it's completely stock. It has A/C, ABS, D35 with Trac-Lok, both tops (before it was an option), and the vinyl interior (better for hosing down).
We have wheeled it hard, and had some stuff replaced on it, but it's amazing as to where it'll go. It's by far been the best vehicle we've ever owned. We routinely run with the intermediate crowd running 33's, with very few problems, but sometimes a locker would be nice. It's the wife's daily driver though, so I can't get too ruthless with it (little does she know).
JEEPN
Winter Harbor, Maine
'81 CJ-8 Scrambled, It's a Jeep, Chevy, IHC kinda thing!
'88.5 Zuki, 7" Lift, Locked, Swamped, Rolled, and just generally broken in right!