Re: How much to replace 2.8?
Reading your previous posts and your planned lift&tire size, the bigger engine, the better. You could go with a 3.4L V-6 from a GM f-body(93-95 Camaro/Firebird) or go for a 350 with a nice 700R-4/NP321 behind it. That combined with 4.56 gears and 33-35" tires should be great! The 3.4 will bolt right up to your present transmission, but will only produce 180-190HP TOPS and thats at a higher RPM than a 90 degree engine. For what you'd have in a 3.4 swap, you could likely buy a good used 350TBI/700R-4/NP231 from a wrecked truck. It depends on what you plan on doing with the truck. Oh, BTW pulling the engine and or trans is a PIA and should only be done once, so make it count! If you think the 2.8 has life left in it still and will produce enough power to turn the lower gears and larger tires, just replace the seal. Also a good time to fix ALL the oil leaks(remote oil filter lines, oil pan gasket) Good luck.
1989 S-10 4x4 4.3L/700R-4, 3.08s, 31" Sport Kings
1989 Blazer 4x4 4.3L/700R-4 3.42s,235 Sport Tracks
1985 S-10 4x4 Soon to have 3504BM/TH350/D44/14FF, 35" Boggers