I want to do an E/CFA on a large group of indicators that are scored 0-10 and have strong ceiling effects. Because modification indices are needed for E/CFA, I can't define the indicators as censored from above and base the analysis on tobit regression. The only two options I can think of are to (1) ignore the ceiling effect and define the indicators as continuous; or (2) reduce the number of response categories to 10 or fewer (perhaps collapsing responses 0 and 1 into a single category) and define the indicators as ordered categorical. Which, if either, of these two options would you recommend? Are there other options I have overlooked that would be preferable?