If you remove the bump stops, then if the car bottoms...which it is more liable to do if you have stock springs and low trim height...you have metal-to-metal contact of the suspension and the chassis. That will eventually damage the vehicle and the loud bangs as the suspension hits the frame will really get your attention.
You can get away with trimming the stops, say, a third of their length, but I wouldn't do it, if the car's ride and handling is important to you.
Generally, a 02-04 Z06 can be lower 3/8-1/2 in in the front and 1/4-3/8 in the rear with no ill effects unless you tend to load the car heavily on long trips. If you do that, I wouldn't lower it at all.
There are alot of cars that sit VERY nice and I can't believe that all of those guys sacrified ride quality so much.
If they are slammed, they've given up much ride quality. They either are too ingorant to know why their cars no ride hard or they don't care.
I tell you, it's fun to race someone in a slammed Z51 or Z06 on a mountain road. It ain't long before I pass them.
Now on a flat race track, the reduced ride height doesn't matter as much but on an surface that works the suspension, slammed C5s with stock springs handle lousy and ride hard.
That said, I admit...they do look good.
My car, sitting a little lower than stock doesn't look at good, but I pass those guys so fast they really don't get a chance to see all the space above my tires.
Lastly, if your the type of person who doesn't drive their Z06 hard, ie: the car's limit handling is not something you're concerned with, then you can lower the car as long as you remember, the ride will be harsh and you'll need to be careful about some road hazards like some rail crossings, speed bumps and driveways.
