"It seems to me that with a lower ratio on a SM420 (3.58), it would be a better transmission for changing to 3.55 or higher rear gears than the 3-speed with a starting (1st gear) ratio of 2.94. "
FYI: I have a similar set-up (and, I like it). I normally use 2nd gear as my 1st gear. (unless pulling tree stumps, or, competing in a slowest-truck race). Even with the 3.55 rear, that SM420's 1st gear is really low.
