Thanks for the info! I will do that soon for the sls. After some deliberation, I decided to trim back the insulation only where it would potentially touch the driveshaft. I then took some extra dynamat I had and used some spray adhesive to provide some sound deadening where I pulled the insulation off the metal. I did not see any way to reattach or push up the insulation unless I drilled holes in the body above the driveshaft, which I was not going to do. I drove the car the last couple of days and did not notice an increase in noise. I am pretty satisfied for now.

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97 S500 (90,000 miles) - wife's car
87 300D (298,000 miles and a replacement #14 head)
94 Suburban K2500 - need something to haul firewood
83 300SD (343,000 miles) (sold)