Dennis, the fix for the water pan problem used to be replacing it with the charcoal pan from a Brinnkman smoke n grill because the Brinkmann pan had a flat bottom. Unfortunately Brinkmann stopped making them. I stopped using water in my WSM and just foil the water pan. If you go the no water route you can get a heavy duty round Pizza pan and foil that. It will give you much more room and will quickly learn how to control temperature without the water. If you cook without water your charcoal will give you a longer cook before you need to add coals and if you want to try high heat cooks you can do it much easier without water.
I think that will give you a lot more room than trying to lower the charcoal grate. Hope it helps.