Normally I know what I want to do with my cars and don't need to ask for other people's approval. At the moment, however, I simply can't decide what to do! At this time last year I was happily thrashing my scruffy 1500 Beetle at every khanacross and dirt motorkhana which I could afford to get to, thus:

It had good mechanicals and sound but battered bodywork, which of course made it the perfect motorsport car for off-road use, as I didn't mind too much about scratches, dents or indeed ripping half a fender off the body.
That car is sadly a wreck now, and my new car is now on the road. It's an S-bug with a straight, rust-free body and rather nice red paint, but currently it is literally a foot off the ground. This spoils the cool looks somewhat, and indeed probably the handling, but it may be useful for offroad work. The question is, now that I have a car with decent bodywork I'm not sure I want to thrash it offroad!
The car has changed a little bit from the photo above, and has a stock front bumper on now. I'm planning on polishing it tomorrow and then getting some new photos. I believe that the rear has been raised a bit too far by the previous owner, as the driveshafts have a significant downwards angle on them when the car is sitting on level ground.
Now that you have some background information, I was hoping that the forum can share some of it's considerable VW wisdom. Essentially, the choices I'm contemplating are as follows:
Option 1: Lower the rear back to stock height, or until the driveshafts are horizontal with the car at rest. Leave the front at stock height. Run the car in offroad motorsport and hope that the paint will fare okay. I do really enjoy khanacross, and it's very cheap, so this was my original plan.
Option 2: Lower the front as much as is convenient, using either lowered sports springs and/or lowered or adjustable struts. Lower the rear to match so that it looks good. The car would then probably be lower than ideal for khanacross, but I could then switch to doing concrete motorkhanas and hillclimbs, perhaps upgrading to modern regularity or sprints if funds allow. This option is tempting as I know that the S-bug would look and handle better when lowered, and in reality I spend 95% of my driving time on sealed roads anyway, so setting the car up for dirt driving isn't exactly relevant to everyday life. I could still go khanacrossing with a lowered car, but the potential for paint damage would be greater. Lowering the car does strike me as looking expensive though, since new or modified struts are really needed to drop it more than an inch.
So, should I go stage-rally style or tarmac rally style? Let me know what you think.