Sorry I missed all the discussion. This subject always seems to bring out interesting opinions in a forum like this. Before you do anything, I think it is a good starting point to look at the torque and horsepower curves for your particular engine and then to sit with a cup of tea and ponder just what exactly you hope to achieve. Transmission and rear end mistakes can be expensive and once a mistake is made, it can be constantly frustrating. I've seen people turn an okay pickup into a wall to wall un-driveable mess...and never have an understanding how or why all the work and money went to snot on them. I've seen people spend gobs of money converting a closed driveshaft pickup into an open driveshaft style with a common Saginaw 4 speed thinking they were somehow going to get an overdrive gear and wind up with a pickup that can't even start on a hill.
I frequently get told my pickup won't work with a 3.07 rear end. But let's look: My transmission has a first gear ratio of 4.03 and that is instructive and important in this case. Chevrolet engineers have proven an ideal first gear overall ratio for a 1/2 ton pickup should be around 12 using an inline 6 (or any similarly powered/designed engine) and tires with a diameter between 27 and 28 inches. This turned out to be such a solid plan they repeated it in thousands of pickups GM made. The OEM transmission (the 3 speed) had a 2.94 first and the rear end was 4.11...making the first gear overall ratio 12.08 for the AD truck. In my case, 4.03 x 3.07 equals 12.37, which is very close to the OEM 1st gear overall ratio. 2nd and 3rd gear follow suit with the OEM overall ratios. 4th drops engine rpms by 25% and 5th drops rpms by another 14%. All works well with 15 inch wheels/tires. At 60, rpms are around 2000~2100. The torque on the 1959 and later 235 maxes out at 2000 rpm.
Now if I were to use a 3.90 rear end with the transmission I have (which some folks here have earnestly suggested is what I need), let's see what happens. My first gear overall ratio becomes 15.7. That's ok for pulling down barns, but a real bad choice for driving in town because somewhere around 14~15 mph you'll need to shift to second. In terms of distance, that's about halfway across a city intersection. For a cement mixer, garbage truck or shorty school bus full of kids, that may be ok, but for a 1/2 ton pickup...even one with 1000 pounds of "stuff" in the bed that's a real irritation. With the 12 to 1 ratio the GM engineers settled on, I'm shifting from 1st to 2nd around 20~21 mph and I'm completely through the intersection and heading off down the street. To me, shift point with a 235 should be around 2800~3000 rpm and since the 235 is anything but a high rpm engine, getting to 3000 rpm ideally should be slower and smoother than the Ferrari approach.
Would a different rear end have been just as good for me? A 3.24 rear might have been ok...it would have produced an overall 1st gear ratio of 13.05 (which would not have been unworkable if I was using 16 inch wheels with taller than OEM tires), but what about beyond that ratio? How about a 3.55? Some think that ratio is really special, but once again look at the transmission ratios. In my case a 3.55 rear produces an overall first gear ratio of about 14.5 and we're we're only a small fraction better than the 3.90 with that. 3.55 with a first gear ratio of 3.4~3.5 would be good, and while that ratio was used in some T5s for GM products (a few minivans), it isn't what I have. The point I'm trying to make in any of these discussions? Just think about what you have and what you want to accomplish. I've got friends who just ran out and bought the first T5 they found and an unknown rear end with no idea at all what they had. One of them is the proud owner of a T5 with a 4.03 first and a 4.88 posi rear. You can do the math on that one...
Good luck!
