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You could probly get it to fit but you also need to think of driveshafts because you'll need 2 new ones. That'll take a pretty penny out of your pocket...
I am thinking out loud here, but can't the tera low kit and the tera 2 low hit be put into a 242 making it have similar gear options as the 300, cast iron case to me only means weight, I can protect the t-case and I only run a 4.0 in the cherokee, I shouldn't break any chains. is the only issue the twin sticks?
I am running the 231/300 made by D.D Machine. Be prepared to cut and beat the hell out of the tunnel. I am also using D.D. Machine's cheap flip twin sticks for the 300. I used two stock XJ front drive shafts. Had one shortened 3" for the rear, the other was lenghted 6" for the front. I used a shift cable for the 231 that used the stock x-fer case lever. I got a realy good deal on the kit w/ 231 already cut and welded and a D300. Total with new yokes for 300, drive shafts, oil sight tubes, twin sticks, boots for sticks, shift cable and all other misc. things is $1500.00. There was probaly 150.00 to 200.00 dollars worth of mistakes. If you have any ? pm me. I took alot of pics and at some time will do a write up.
A) the 231/242 combo is REALLY long. even assuming you do the sye on the 242. the length creates some wierdness with driveshafts(but not as much as it would on a short wheel base rig)
B) As brian mentioned above it can't be twin sticked like a 300.
C) The primary benefit of having a 242 is the abilit to run 4hi(unlocked and through the internal diff) on dry pavement. this benefit is kinda uncommonly desired on the the sort of rig that you should be thinking of a doubler for.
My DD has a 242. i live in WNY and i love that 242 all winter long. it sees some mild trail use with no problems. I would build a serious rig around one though.
the 231/300 combo is the same length as a 231 was before the sye. it can be twin sticked, flipped, cable shifted, and its all-gear tough. I don't know about where you live but the last 300 i bought from the junkyard was 75 bucks and my little brother thought i got robbed.
it's not that i am saying the 231/242 is a stupid idea. but i am saying that you should think about what you want to do with it and think about whether or not it will be a good way to accomplish your goal.