Here is my take on viable options as I've taken the KICS (Keep It Cheap Stupid) attitude with my TJ.
1. Trialride. Go wheel your TJ. Get to know it and your capabilities. Wheel with others with similar and slightly modified TJs. Learn their approach to obstacles and yours. Note deficiencies of the suspension, tires and axles. Driver's skill is experience learning.
2. Safety, recovery and communication. You'll need first aid kit, fire extinguisher, tow straps, hi-lift, full size spare, frame mounted recovery hooks/hitch frame, CB for communication. Winch if you got the $$. Hi-lift to help use as a winch and to change the tire when necessary.
3. Aggressive tires, lift, axles. These all rub and compliment each other. I could suggest the axle swap, but a viable option is to keep the D35 and strengthen it with a proper kit for a lesser cost than the axle swap. Cost plays the biggest role here.
In order to take steps, I would suggest a simple 1" body lift, front sway bar disconnects, and 2" coil spacers for the stock springs. This will provide more than enough room for larger tires. However, don't go overly large just yet. This will keep you from spending for gears and lockers and determining if you want to keep the D35. Find some used 31's/32's. You may need to get proper offset rims to clear the tires rather than use stock rims. I beleive 31's are fine, depending of the backspacing of the stock rims.
With the 1" body lift option, you gain the capability of raising the crossmember with a flat belly plate. Introducing this, you may have to do a SYE to eliminate any vibrations.
With a 2" spacer lift, you gain lift. But will have additional cost with new longer travel shocks, front sway bar disconnects, and proper length brake lines. Its not a complete suspension lift system, but still acceptable. This option provides longer travel capabilities than stock. In comparison to a suspension lift, depending on the lift height, most kits provide arms, coils, shocks, pitman arm, track bar brackets for a much larger cost. Once you go this route for some time, you could go with a suspension lift system and sell off your spacer lift and redeem some money.
Front YJ brake lines are 3" longer than a TJ's so that's an easy swap. The rear brake line doesn't need to be swapped as its the length of the rear upper control arm. If you significantly length the arm, you'll need a new brake line.
Shocks are relative. You'll have to pay attention to the collapsed length. You could collapse the shock too much and damage it. On the axles, the bump stops stop the axle from further up travel. Adding bump stop risers and longer bump stops prevents you from collapsing the shock fully. They also help keep the tires off the body.
Control arms and track bars. You could get away with keeping the stock arms and bars with a 2" spacer lift. However, the track bar is what controls the lateral movement of the axle and at ride height, maintains the axle centered under the TJ. When lifting the frame from the axle, the axle is no longer centered. Adjustable track bars are readily available to recenter your axle. To minimize bump steer on the front axle, the track bar angle from its mounting points should be as parallel to the same angle of the drag link (pitman arm to knuckle). The rear track bar is necessary just the same, but its angle is not as critical, but is still related to the suspension geometry. For control arms, you'll want to invest in a complete set of arms that minimize the amount of stress on the mounting points. Heim joints, johnny joints, and arms that twist on themselves provide this to an extent. Try to stay away from arms that are rigid and provide only bushings at the mounts.
4. Other upgrades. Skid plates for the gas tank, bumpers for protection, rock skids for kick panels, lights for night driving, rock lights, etc. etc. etc.
5. Mechanicla maintenance. Maintaining the mechanics of the Jeep becomes more timely with a wheeling Jeep, modified or not.
How I started with KICS:
a 1" body lift, 2" spacers (ACOS front for adjustability), longer shocks, adj. upper rear control arms (to help adj pinion angle), front adj. track bar, adj. lower front control arms, bump stop risers, YJ front brake lines, 4.88s/lockers in D30/D35, 34" LTBs on 15x7 rims (3.75"BS), hitch frame and my old Ramsey winch. Wheeled that way for about a year. I also added in time Currie steering, stabilizer, rear adj track bar. The next year, I replaced the D35 with 8.8 (geared/locked, cost ~$1100) after breaking an axle. Added bumpers front and rear, couple other maintenance items. Next to come will be doubler (SYE), flat belly, rock skids, body protection, gas tank skid, family cage, and maybe seats.
Check out my articulation pics and you can see a little transition on the suspension.
KICS
