Well, let me start with hello there and nice to see an older jeep getting a workout. I am sure you have researched more than enough that you head probably hurts!
You would have better advice from NAXJ.ORG site or cherokeeforum.com, but I can assume that you have already been there & done that. There are plenty of PROS vs. CONS., some of the large ones or more important factors are
weight, comfort, and longevity.
Weight, itself compared between 4.0L L6 (gas) (#483) and the 4BT cummins (#782) is a difference of #299 pounds. Take into fact the extra weight you are going to haul around DD. Not that it looks like it matters, to me, because you seem to want to take on a project. Sure Gas vs. Diesel, I would choose a diesel any day. Quick question, ever thought of using the factory 2.5L dsl from the XJ? They do not have as much unff! You save time and money depending on what you have in it now...
My
$0.05 worth, if any to anyone?!
"COILS"
Pros:
Improve both ride quality.
vehicle handling (steering only).
Flexibility
Top grade technology
Cons:
break
bend
shoot out from underneath your JEEP.
Expensive
cannot handle weight
Longevity is shorter span.
"LEAF SPRINGS"
Pros:
simpler to fit and easier to adjust
cheaper
Handle more weight easier, it distributed EVEN!
Longevity is great until they sag, then replace and repeat
Cons:
OLD technology
BIGGER pieces
Weight more
NO creature comfort at all
NO improved handling or flexibility to a point.