I'd swap the 4BT for an R2.8L
The only issue I have with this option is that it is a new diesel, not the tried and true engines. Like the 4BT or the OM617. With the 2.8 you still have an ECU and all that fancy electrical stuff that leaves you stranded. Just my two cents.
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I have a 4BT in a '71 Scout, it works great, and overall I'm very happy with the swap. But at $9K delivered, I will pull the 4BT, sell it, and put the R2.8L in, as long as it can mate to the 4L60E currently in the Scout.
Here are the personal reasons I will do this:
1). Quieter
2). More power, less smoke (for off road that is really important to me, especially when traveling in groups)
3). DOC reduces the smell of the exhaust (again for group travel, and in campgrounds)
4). 250+lbs lighter, for a lower more centered CG (really important in the big rocks, and off camber), and less impact on the trail
5). Less under-hang for better clearance with the front axle center section. This means the engine can sit lower.
6). More compact size, allows for more "stuff" under the hood. Like a Power welder, Air Compressor, Manifold Burrito Cooker
7). No hassle emissions compliance
8). Warranty
I have less concerns about electronics, than I do mechanical systems with moving parts. Cummins has been using similar ECMs in road going diesels, for a couple of decades now.
In the pictures below, you can see how much room the 4BT takes up. I have 3" of body lift, and will be going up another 1/2" when fabricating the new body mounts for the frame. Overall the R2.8L is a nicer package for smaller engine compartments. I could probably drop that body lift down an inch or more using it.
Picture 1). Right after setting the engine in place. No turbo, because I had to swap exhaust manifold to make it fit
Picture 2). How the turbo install went, which sits it over the valve covers.
Picture 3). The overall install. Everything is serviceable, but kind of bulky
Picture 4). The inevitability of dealing with old engines. I had to reseal the Injector pump due to leakage in the head cap, and have the injectors service. After all that I ended up sending it to a pump shop, because the automatic timer failed, and created too much internal pressure, causing the input shaft seal to push out, filling the crankcase with diesel fuel. Had them tune the pump for more power at the same time.
