You shouldn't flat tow a Dana 20 or Dana 300 for any distance (more than 10 miles, I'd say) without dropping the rear drive shaft. The rear output bearing doesn't get enough lube unless the whole thing is turning which just increases drag. The rear shaft should only take 5-10 minutes to drop out and saves a lot of wear and tear on the tranny and x-fer. I have towed mine (Dana 20) across the country a couple of times with no problem, although someday I want to build a trailer just to make things easier on the tow vehicle. There is also an "oil paddle" mod that I have seen done to Dana 300s that is supposed to splash the lube oil up into the bearings.
The Grim Jeeper!
The Grim Jeeper!