Re: engine swap for \'88 YJ?
The "hissing", lack of power and leaking oil seals (due to the increased backpressure in the crankcase) that you are experiencing is probably due to a plugged cat-con, have an exhaust shop check your backpressure! New cat should cost less than $200 installed! A reman 258 should cost around $1200, for a quality job with a good warranty, (no less than $700 if they skimp on the parts). Mopar remans cost around $2000.
As far as a Mopar Magnum V8 swap goes, a switch to a 3 speed 999 or 727 automatic would be your best bet, unless you can find a NV 3500 or NV4500 5speed equipt 4X4 Dodge. Using a '94-'95 YJ slave will connect the clutch pedal to the trans easily, and the t-case from the Dodge would work well if you installed a slip yoke eliminator, (or rear shaft parts out of your 231 t-case). No aftermarket adapters would be needed.
The Magnum V8 would require a larger radiator with inlet and outlet on the opposite side, and fabrication of engine mounts, (as ready made ones aren't available). Dodge truck/Van exhaust manifolds will fit fine. '95+ Ram truck mounts would be the best factory mounts and are the easiest to make fit. The engine package is approximately 3 inches shorter than the 258.
If you wanted to keep the EFI, you would have to modify the factory harness, add a 4.0l, in-tank fuel pump (or add an external pump), mount the controller, etc.
There is a manifold available to mount a 4 barrel carb on the Magnum engines, and the earlier smallblock Mopar ignition parts will fit fine.(if you don't need to smog it).
The cost could be kept under control, if you are capable of doing most of the work yourself. The engine, trans and t-case should cost around $3000 at a wrecking yard, most will guaranty them and may even take in your old parts as partial trade. Try to find a yard that would be willing to work with you, as you will probably need to go back for a part or two.
Hope this helps, good luck!