Mine's a '97 with the 2.5 so it should be exactly the same. Axles should be 4.10's D30/D35 combo. I had a 4.5" lift/1"BL and was running 35" tires... It was too much. Not necessarily because of the motor but because of the gears in the axles.
So, my tasks over the winter include replacing the axles and in doing so, I will change the gearing and include lockers... I am going with 5.13's and ARB lockers Fr/R. Tire size will either stay at 35 or perhaps up to 37's, we'll see...... I am not looking for a speed demon, just the ability to climb up obstacles and be able to keep the wheels spinning when needed. I will see how this fares out and then hopefully/perhaps look at changing/modifying the transfer case to have 4:1 gearing.. This and the re-gearing on the axles will definitely give me the lo-range i am looking for....
I will only look at the motor if the current 2.5 blows up !!!!