I used to have an 8 years old Kona Kula - good XC bike. It was sold with Marzocchi XC500, 2 inches of travel (1995 year) fork - one of the very good in that time. Two years ago I had to replace it (after some crashes it wasn't strait any more - the V brakes didn't work) - most of forks were up to 4 inches. I was affraid about the geometry of the whole bike - but as i didn't have a choice i bought 3,2 inches one (8cm) and wasn't that bad after all.
To some extent you can model the geometry with fork and saddle but not all could be modelled that way. Of course the front of the bike will go up - which could affect you climbing a bit - but it is nothing you can't live with.

To conclude the long story - The geometry will change but you could still ride your bike and have the same amount of fun.

Definitely it is not that big difference to buy a new frame.