Rather than give specific suggestions I would suggest an approach, a method.
There are certain things that need to be changed together, other changes can be made individually without regard for the rest of the veh.
To use a silly example. You are running 29" tires and decide that you need 33s. Change them one at a time as you can afford each new tire and take several months to complete the change? Yea, it would probably work, but geez...
Make a list of the things that should be changed all at once in order for the veh to still perform. You have a chunk of money to do that. Then wait for the individual mods.
1) Body and undercarriage protection, skid plates, body armor etc. All these are VERY important if you off road. When someone asks me about doing mods, I tell them that even my CBrack is not a good FIRST mod. PROTECT THAT UNDERCARRIAGE AND BODY. But your case is a bit different. You don't have to off road. You don't have to do extreme off roading. If your $3,500 was spent on the things that need to be done at the same time, you can add a skid plate here and there when you have some more money. Just don't tackle the rough stuff til you are protected.
2) CBradios, CBrack [img]/wwwthreads_images/icons/wink.gif[/img], bekini tops, other tops, soft doors, Tuffy boxes, chrome this or that (ugh), bug screens, lights, bumpers. ALL GOOD STUFF, but all can be added one at a time as money permits.
Stuff that needs to be changed all at once.
1) Tires as a set but also in conjuction with axle ratios, lift and the axle itself.
2) Lift. The TOTAL lift which would include control arms, springs, axle rotation, drive shaft and tail shaft conversion. A suggestion: Whatever lift you decide on, make sure that the upper and lower control arms are adjustable for length. This makes it a snap to rotate the axles as well as move them backwards and forwards. If you get into 35 or 36 inch tires, the rear axle needs to move backwards just a bit to keep the tires from hitting the front of the rear wheel well.
Tires and lift are really two separate packages that can be done at separate times. Doesn't mean that you would like the rig before it is finished, but at least it would work in most situations - not like running 3 29" tires and one 33" tire, or changing the gear ratio in one axle only.
You could put a very good 6" lift on, or 5" or whatever as your first mod and change nothing else. It would look funny, but it would work. You could then install larger tires with the idea of doing the rest of the tire package later, but if you do, just realize that you have to be careful on the trail, cause stock D35 axles are not made for that application, and also realize that your hwy performance will be greatly altered too until you change the gearing. You may not be able to use 5th gear, for example. If you do not put a locker in the rear axle, the odds turn much more in your favor for not breaking it.
You could do the tire package which would include tires, axles, lockers, and gears and a CHEAP lift. That would still work - not the best, but still better than the 29"/33" tire combo.
What I am trying to steer you AWAY from is spending all your money only to find out that you have created a machine that will not do what it was able to do before you ever started changing stuff. And find that it needs another couple of thousand dollars before you can get back to "fully usable".
Another thing you might consider is that Jeepers frequently make changes only to find that the changes they made do not fit with the rest of the setup. (what I am advising AGAINST here) At that point some after market parts become available for a much lesser cost than they were when bought new.
Am sure there will be differing opinions, but I think everyone will agree - Think it through over and over again before you spend your money.
Doug '97 TJ
Creator of the CBrack