Hi airtren,
I have struggled with the use of airspeeds, including TAS, for the Kinetic to Potential Energy conversion/conservation, and I came to the same conclusion that the speed relative to the ground is the one that is relevant.
Simply use the air mass as your frame of reference. It may be moving horizontally over the earth's surface, but the conservation of KE + PE still holds.
IAS is just a measure of dynamic air pressure, it must be converted to TAS.