The other part was the top most section where it joins the arch lip. It has a slightly bulbous shape which means my tyres would push against it when I was fully aired out and as it turns out, were preventing it going lower. Having cut off the section (see below. The one on the top looks bad because I had been heating it and bending it but I realised it wasn't working so cut it off) I now need to come up with a solution but that is going to be tricky. I know quite a few low caddy's have done this or removed the liners, but I'd like to keep them as much as possible.

I've had my arches rolled on a MKIV R32 using the method you describe. Done carefully you can gain quite a bit of clearance.