So my realtor mentioned to me these guys http://hightechdormer.com when I talked to her about possibly redoing the dormer in the house we are buying, so we can fit the whole bath. Apparently she had couple of clients who used these guys. They somehow cut off the dormer, raise it and frame it in, instead of tearing it apart and etc.
It might be a solution to my issue of putting in a bathroom in the existing dormer. If I get another 2 feet in ceiling height, I will be happy camper than. Both I and my wife are over 6' (I am 6'5"), so existing ceiling height won't do.