Are you certain that the original engine is trashed? That 302 will make gobs of torque, which is what you really want in a 4x4, unless you're building a monster truck. Adapting a V8 shouldn't pose too much of a problem, you'll need to find a Chevy V8 bellhousing with the same trans (probly an SAE #2 pattern) or possibly a GMC V8 bellhousing, which would be a BOP engine pattern. The transfer case should be a divorced system, so only the shaft from the trans to the 'case may need alteration to match whatever trans you choose. Personally, if you were to go automatic, I'd suggest either the TH475 or some sort of Allison, like from the aforementioned school bus. Don't worry about the T-case strength. Most likely it's either a Rockwell or Timken unit, or maybe a Coleman. Either way, they'll be much stonger than any later model T-case.
