I've heard/read a lot of hearsay about these drivetrains.
That vintage trans is a Aisin A340 or whatever TLC specific variant it is. Supposedly pretty much the same trans as the AW4 in the Jeep XJs. I only mention it for anyone that happens to search the forums in the future.
That said, that means that you
may be able to get past some of the electronic shenanigans via the use of an aftermarket shifter (see
http://awshifting.com). If the TLC setup is similar to the Jeep specific setup then the transmission has its own stand alone computer that can be used independent of whatever engine electronics you may have. A `97 LX will be OBD2 compliant which means that codes
may be thrown when you switch the controller to something like the awshifting unit if you keep the engine ECU. This is what happens with the AW4s used in the 97+ Jeeps anyway; the Jeep engine ECU throws codes when the trans is switched to "manual" mode.
Conversely, there is a guy (JJacobs at NAXJA.org) using the AW4 w/ TCU behind a carbed (Holley EFI maybe?) AMC 401 without any issues. The controller works the transmission fine.
For the engine I dunno. It has a reputation for being a thirsty engine that will last "forever". Sounds about the right mix for a TLC, no? the electronics may be integrated into other stuff, I don't know. The last ones ~`97 have a reputation for blowing head gaskets at ih8mud.com but I think that might just be anal owners getting their knickers in a knot and being proactive. The Toyota specific replacement head gasket is supposed to cure the "problem".
I like the 1UZ as well. Nice, light, small, supposedly cheap to source (haven't checked myself). I dunno about the electronics. I forget a bunch of stuff that I read at lextreme.com. Again, easy to use these trannies (A340 or AW4 if you wanted to go to a NV2xx t-case with centered rear output) with these engines. It's all in the bellhousing supposedly. There are megasquirt setups for the 1UZ setup supposedly but given your sig line probably not a good idea.
Thing about the 1UZ though is that for all the neatness and such at the amount of effort and money to get one installed you could probably do a Generation III or IV Vortec SBC w/ 4L60E and not be caught having to source soon to be EOL'ed parts for a lot less money.
There's probably other stuff I meant to put in this post but real life calls at the moment.
FWIW, I love the LX450 / TLC FZJ80. Sometimes I kinda wish I had gone that route instead of the XJ but at ~15 mpg versus the ~22 mpg I get now as a daily driver I guess I'm better off with the more lightweight vehicle that I have to re-engineer the hell out of to get close to the strength of the stock 'Cruiser. I could buy a hell of a lot of gas for the money I'm putting into the XJ...