I run 35" and 36" tires with my 5.38 and I'm very happy with my rpm range and ability to accelerate on the highway. I would definately be wanting more if I had 4.88 gears.
You can take the old spring perches off with a 4.5" angle grinder fitted with a cutoff wheel, generics run about $20.
I would recommend bolting up your axle with new ubolts, rotating the axle for proper pinion angle (to your liking), then trailer it to a welder.
