Is it just hitting the upper control arm when you turn or fender?

 

Speak for yourself on 325s being too big because Im runing them just fine. But I am higher that he is which is why I would suggest finding out what kind of 3" front lift he put on and then suggest additional pieces accordingly

 

You have 24" rims, he has 18s....

 

Do you think a 4" lift would fix the problem?

 

I don't want the lift any higher than necessary

 

You need different wheels. It appears that the rubbing in on the rear of the wheel well where the fire wall comes down...correct? It also appears that your wheels put the tire outside the fender lip. You need to move the wheels in more with a different offset or backspacing.

Wheel diameter has NO affect on whether a 325 width tire will fit. It is 100% offset related. I am running a 12.5" wide tire on the stock wheels and don't come close to rubbing except on the swaybar on the driver side. My tires are equivalent to a 315 so his are only 10 mm wider (less than 1/2").

 

It is hitting the fender towards the back at the fenders lowest point. If I turn to sharp in reverse it bends the lip of the fender out.

 

it's your wheels, they are street wheels, you know like spinners, LOL...

Seriously you have plenty of height, get a set of wheel with at least a -12 offset and 4.5" of backspacing and your troubles will be over.
Wheel spacers would work too, but I am not a big fan of them, especially on a 3/4 ton truck.