I ran my Ranchos through the whole range of settings a couple weeks ago, starting at 1 and ending the week on 9. Definitely NOT the best ride at 1. It felt too soft and, yes, bouncy. 9 was a bit too harsh, but handling was great. I've rolled them back to 7. I've probably got 30K miles on my shocks.

As far as the squeak is concerned, there are several threads related to squeaks and solutions that are not related to the suspension, but the hood. Run a search and check out the latest solutions, including wrapping the hood latch with tape.