Raising the engine 1" will increase the tendency of the airplane to pitch down under full throttle and pitch up when you throttle back, as on landing. It will definately require more downthrust in the engine.

More pitch does not increase thrust, as you have discovered. In fact, it is the high pitch that is causing the long takeoff runs. If you could use a 6 pitch, it would take off shorter, but of course you would lose top speed in the air. Engine load wise, a 10 X 8 is about right for the 50SX. I run a 12 x 4 on mine, which is about the same prop loading. If you are running a wood prop or master airscrew you can gain a lot of thrust by just going to an APC 10 x 8.

Another alternative would be to try a 10 x 7 Graupner 3 blade, but you would lose some top speed.

Jim