Don't use a spacer lift. An OME lift and some 245/75/16 all terrains or mud tires will make it much more offroad capable. There is lots of Liberty information at lostjeeps.com.
You can ignore the part time light or replace the sensor on the transfer case. It won't hurt anything. I drove around for about a year before I fixed mine.
I don't know about the shudder. The 42rle will shudder in reverse but not typically going forward.
I just cram loose stuff under...
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