Before I added the 1" spacers to Stu's coils, I ran the rear sway bar with both links removed, and let bar ride up and down on the control arms. Worked great on the trail without the bar binding on the axles.
When I added the spacer, I had binding so I put the links back in. But because of the spacer, the sway bar was now "pre-loaded". This made the rear suspension really stiff, and hitting pot holes would cause the back end to jerk and throw itself around.
I thought about cutting the bar off, or a disconnect of some kind.
Instead, I decided I'd try modifying the links by replacing the plastic spacer with a thin piece of vinyl tubing (.5 o.d x .37 i.d. x approx .072 thick).
This spaces the rubber bushing/bumpers apart and gives the bar a little over 1" of travel to slide up and down (with no metal/metal contact) before it hits the rubber bumpers. When I installed it on the control arm, I tightened the nut on the bottom till I saw the tubing start to compress, than backed off and added the jamb nut. The link assembly can freely move about, but can't fall out.
I took a trip up to the mountains, making sure I purposely ran over a few potholes on the way. The violent jerking was gone, and out on the trail there was no binding or rubbing of the bar on the axles that I could tell.