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I've been thinking of the same idea, except my ranger is four wheel drive. Live axles suck. I'm getting about the same mileage as you, and i have a 3in body lift and 33in mud tires. So driving habits help alot. I'm assuming you have the 4.0SOHC, the only thing to worry about with those would be the timing tensioner. I have 99K and they are shot. Doesn't help that i sucked water in last year, overheated, and now i burn oil faster then gas.
With the pulse vacuum hubs on the older front diff's there is a conversion to make them manual locking hubs. so with welded gears and only one half shaft that part is do able
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Randy
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