Keith,
I think it's worth noting first that dampers are added to damp out too much suspension movement - calling them shock absorbers make some people think they absorb shocks, which they don't.
It sounds like your axle is carrying a fair percentage of its design capacity, so it is possible that you've got into the range where damping might help. The rubber in torsion axles does have some built-in damping, but not a lot, and certainly much less than a pair of dampers will give.
First I suggest you carry out the traditional damper test, just like you would on an old car. In case this is too old a test for any here, it goes like this: heave down on the trailer (maybe by jumping on some part of it - but pick a strong part!) and watch what happens. It the trailer goes down, comes back up again and then stops moving, your damping is fine. If it starts the trailer bouncing or rocking three or four times (or more!), then there is insufficient damping and adding dampers would help.
If you need dampers, those Monroe kits look like they're designed to do just the job. I wouldn't be worried about a 1/2" horizontal hole through a 2"x2" tube harming the strength, as long as the hole is at mid height of the tube.
Actually finding the space to fit the dampers might be a problem.
http://www.shockwarehouse.com have kindly provided a photo of the Monroe 516 kit
And here's what I think it might look like with
the damper attached to
the bracket which is U-bolted to
the axle arm:
I don't know the size of the bracket, so this is all a bit of a guess. But you will definitely need the space between the frame and the wheel/tyre to mount the damper, unless you can construct a mounting bracket under the frame (though that will put the damper at a fairly ineffective angle).
Andrew
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