The reason people reccomend removing the bio-balls (and generally don't like Wet / Dry filters for a reef tank) is that the texture of the bio-balls has a tendency to trap detritus and debris allowing it to break down, decompose, and eventually create nitrate issues. Live rock would be better, but in my opinion probably isn't much better. The holes, pores, and crevaces in LR will create the same issue.
My reccomendation is to SLOWLY remove the bio-balls, a little at a time, over the course of 2-3 weeks, this will prevent creating a drastic reduction of denitrifying bacteria, use the drip plates for poly, carbon, or other "sheets" of things to filter and polish the water. If you're good about changing the filter pads then I'd say go ahead and add LR to the bio-ball section, but you have to remain diligent in replacing the pads regualrly.
In order to get the currently high nitrates down - water changes. Several large ones. The solution is dillution.