Yes, the transmission is very noisy, although it quieted down to barely noticable when I screwed down the inspection cover on the tranny tunnel. Whatever oil you use, make sure it's approved by NVG. I hear the synchros can go bad quick if you don't use approved stuff.
It is absolutely necessary to get a new pilot bearing. There is no way the input shaft will fit inside the old pilot bearing, in addition, since the input shaft on the 3550 is shorter than that on the AX5, the pilot bearing must protrude out about a half inch from the flywheel to get a solid engagement. I actually have another pilot bearing that was lathed and reamed from oil impregnated bronze that I could sell you. I asked the machinist to go ahead and do the whole 6" piece of bronze, but since it was oiled, he got fed up after 2 were cut.
For the transfer case, normally you will have to modify the linkage, but I swapped in a Dana 300, so I junked the 231 set up. Right now I'm not using any shifters for the Dana 300 because I don't want to cut a hole in my passenger floorboard, but eventually I will get cable shifters.