Re: NP231 vs Dana20
Your friend might want to consider the combo I am in the middle of swapping into my YJ (4.0 engine stock):
T150 or T176 b/h
NP435 from ford F350 (6.69:1 first gear)
Dana 20 from an early bronco (2.46:1, driver's side drop)
Assuming he hasn't already switched axles.
The jeep d20 is passenger side drop.
the bronco d20 is 2.46:1, driver's side drop, twin stickable, you can get 2wdlo, by removing an interlock pin you can get fwd lo or hi, gear driven, iron case, you can tera low it to 3.15:1, I've heard of 4:1 kits but I'm not sure of the manufacturer's reputation, and it is the shortest gear driven transfer case you can get - shorter than a D300, I THINK it's even shorter than an atlas, certainly shorter than the np231n with SYE.
I am not finished yet, but according to my calculations my drivetrain will end up with a rear drive shaft 1 - 2.5 inches LONGER than my current one with an NP231 SYE. The NP435 has a long output shaft which means that if you are willing to do the engineering and work it is possible to make it even shorter, OR to put an NP203 reducer box between the tranny and xcase - Chris Waterman made his own, and Wild Horse's sells a kit that does the same. So the gearing possibilites are pretty deep.