Re: 304 engine
I have had Jeep 2.5s, a 258, a 4.0, and 304s as well as a Chevy 350. It all comes down to what you want to do with the Jeep. My CJ5 304 is a hard core trail rig and I am looking to upgrade the 304 to an AMC 401. Not because I want Tim "Toolman" Taylor power, but for the fact that I know that I will have all the power I could ever need for what I do. (Well, maybe just a hint extra for the "Toolmans" sake.) The point is that this is my play rig and when I punch it I want it to go! Thats my personal desire.
As the lockers and suspension on my CJ5 make it to twitchy to drive on pavement very far, my other rig is a 94 YJ with a 2.5. I use this Jeep for driving around town and dirt roads that require some substance to the suspension but are not true "wheel'n" trails. The 2.5 gives me plenty of power for that and is fairly economical and sporty to drive.
If I can only have one Jeep to drive, I am going to hold out for the V8. There is just something about the sound of a V8 and being able to have the power there when you want it. However, is this going to be a daily driver? Gas is how much a gallon where you live? You know, just when you think that you have made up your mind....