I suggest you consult an engineer and have him evaluate what you want to do. You may be able to raise the ceiling, but you will most likely need to make structural changes to support the roof/walls.

You've got to leave room for proper insulation levels, so even if it's possible to raise the ceiling structurally it may not be possible to do because the amount of R value can't be achieved with higher ceilings and less area for insulation. In most climates, you'll also have to have ventilation over the insulation as well. And maintain a 7' ceiling height for the living area.

im sure the Rvalue of the old insulation is terrible. It gets really hot in the room in the summer. The winters are okay because the furnace is on. What kind of Rvalue should u go for in New york weather?