Mine also has the 4-cylinder. If you're going to keep it, gearing is your friend! Keep the engine in a good state of tune but don't throw ANY money at performance parts. The only part you WILL have to watch out for is the rear axle. D35's have a flexy housing that eats up R&P's and blows the c-clip axle shafts if you put bigger tires on it. Look into the Ford Explorer 8.8 swap. Equivalent strength to a D44, 31 spline axles, factory disk brakes and it's practically a bolt-in. That plus your HP D30 front axle will run a 35" (37's if you're mostly in the mud) tire if you don't beat on it too hard, lol. Anything bigger than that, go straight to a set of one-ton axles.
If you want modern power, there are LOTS of engine swap possibilities. Let your desire and budget be your guide
As you add armor to your Jeep, the weight will run up quicker than you realize and there won't be enough gearing in the world to keep the 4-cyl happy. Especially if you want to be able to run at highway speeds.
Lift wise, there are plenty of bolt-on kits that can work pretty decently. I'm running an old-school Trail Master lift that we tuned by adding/removing leafs. It came with 5 leafs per pack and I'm down to 3fr/4rr. Ride and articulation is greatly improved. If you step up to ton's, ditch the leaf springs and install a good link setup with coilovers.
For tire clearance, install a set of factory TJ flares. It's a common mod that will give you quite a bit larger wheel opening. Here's a comparison pic:
Here's ours. 1995, 2.5/auto, 4.88's, Spartan locker in ft axle, 4" TM lift (softened to about 3"), 1.25" body lift, TJ flares, 35's on 15x10's. Nothing fancy but it's served us well for a lot of years.
Having fun on the Kane Kreek Trail.
