Please people, stop telling him that for a family of 5, an XJ is his best bet. Forgetting that fact that I could not close some of the doors when cross axled (90 Laredo with zero rust and in great condition), it just is NOT big enough. OP, how tall are you? If youre over 6', people trying to sit behind you are going to absolutely hate your guts. Not too much that a kid in the back seat will be able to kick the crap out of your chair because it will basically be in their lap. And forget the 4BT. They really are NVH nightmares. Sure, theyre tough motors but when no matter how much insulation you have lined the cabin with, youre still rattling inside, thats not all that attractive. They are popular in the LC world and also the most common diesel to pop up for sale.
The guy who is getting 30 mpg hwy is getting that because he is geared so high the motor is barely has to work, in a flat state I am willing to guess. His city number is low because his motor has to work very hard to get the truck moving because of said gearing.
I mentioned the cost because it is a serious consideration. The swap will cost you at least $8k, if you do the work yourself (time, motor, trans, transfer case, axles, lift to clear taller motor, etc...). It will be even more if you have someone else do the work. On 32s with bumpers and a winch, I was getting 18 mpg combined. Highway, around 22 at about 70 mph. City, about 17. Diesel is about the price of premium and although I did get better mileage than the 10 to 11 that a normal, comparably built and geared gas 60 was getting, it was not worth it. There is no perfect solution. You are going to have to deal with high teen mileage numbers no matter what you do, and it will get worse the more crap you bolt on. Trucks are big and heavy and not aerodynamic. The difference in cost of entry for a diesel truck is so much higher and fuel is so much more expensive than regular, that you will have to log some serious miles for you to break even. If you really want a diesel truck, call up Proffitts and talk to them about a complete swap. Theyll install just about any motor you want and do it in a way to make you swear it was factory. Be prepared for a serious (but worth it) price tag though.