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To answer your gear ratio question -- obviously the 3.08s will give better mileage. I made the switch from 3.73s to 3.08s and I don't find a problem.
Note that I have an SM465 tranny, though. Lowering the rear end ratio actually helps make the granny first a little longer. People with TH350s, with it's much higher first gear ratio, might have a much different opinion on the swap.
Brian
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