Thomas Paine would support Phelps, but almost certainly sympathize with Snyder. The defense for the thesis is contained within Paine's Rights of Man published in 1791.
Paine, throughout his publishing life, argued continually against government intrusion into the life of the citizens. In Common Sense, he decries government as a "necessary evil". However, Paine also expounds on the abilities and rights of man in their interactions with each other. In Rights of Man, Paine remarks the government only makes "a small part of civilised [sic] life." He also believed man had an obligation to control society through a mutual understanding of respect. Respect for the law should have a "mutual and reciprocal interest" for man to follow. Under these premises, Paine would have sympathy for Snyder and perhaps chastise Phelps for his wanton disregard for his fellow man.
However, on the legal defense of the action Paine would have stood with Phelps right to object in a profane manner. Paine argues no article of a constitution, the amendments must be included, should be altered or infringed at the discretion of the government. The First Amendment guarantees the freedom of speech and such should be protected regardless of the vile nature. Paine criticized the government and was thrown in a French prison for his comments. Therefore, it is easily seen he would have protected speech as an absolute right of man in challenging the government. Although Phelps speech may not be palatable to many, it is nonetheless challenging the government. Paine viewed this as a sacred right of man and a duty when the government is unjust.