I think the consensus on this board will be that the bushings are shot and need to be replaced. I've never seen a pair that weren't. When you put the new bars in you are adding a lot more stress on the suspension and it's going to move because the old rubber bushings can't handle the load. Your alignment settings will change as you are driving which will make the handling a little scary. Since you aren't taking the whole rear end apart, you can try it and see how it is but if you end up having to drop the whole rear end, definitely change those bushings at the least.
Do a search on here to see what a pain it is to get those old bushings off the spring plate. Everybody has their favorite method, I used a torch, 2 old screwdrivers, a knife and hacksaw and a wire wheel! It's dirty, time consuming work!
Seems to me a 2" hole will work fine, the bars are about a 1 1/2" diameter at the ends.
Good luck, and remember however you do it, take lots of measurements first. Read the how to article on this sight a few times through first.