What do you have for bump stops back there? Looks like your shocks are bottoming out...

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Stock bumpstops in the rear. Could bottoming out my shocks seriously be the culprit to this problem? I can't recall doing anything that would bottom out my shocks though... I've only hit Jeep roads and the pavement since installing this lift, which of course gave me more height -- thus extending my shocks -- than my 2" budget boost, which compressed my shocks.

 

I would definitely try and isolate where that clicking sound is coming from. I had a similar sound and it was the trackbar hitting my driver side spring. My springs were bowing and rubbing the TB which are now corrected with RK wedges. But not sure that would have anything to do with your shocks failing.