I've never done an axle/drive shaft setup on an XJ. I've set up 2 jeep CJs(a -5 and a -8, the -8 twice)
Here's what we did:
For a double carden joint:
The jeep should be level. Have an angle finder around. (a cheepie from a hardware store is ok) Set the spring perches on top of the axle housing. Loosely bolt up the U-bolts so the axle is supported against the bottom of the springs with the loose perches holding the axle tube centered on the pin. Get the whole thing up on jackstands unless the jeep sits high enough to sit comfortably upright under it.(unless of course you LIKE back pain!) Jack stands need to be under the spring right next to the axle you're working on. The suspension needs to be compressed to regular running height with the full weight of the jeep. Another possibility is to bolt on a set of tires and let it sit on the ground. Chock the tires. (You do it this way, the axle will not want to rotate on the perches!)
If you are lucky, and already have your driveshaft that is about the right length, install it. Use a big rubber hammer or a dead blow hammer. Tap the pinion nose up until the pinion is even with the drive shaft. Check the angle of the pinion (flat spot somewhere on the nose of the dif. housing) against the angle of the drive shaft. If you want to, leave it 1/2 to 1 degree down to account for torque. If you are doing your own welding, tighten the u-bolts down tight(not torqued) and tack weld the perches in place(make sure the housing is centered on the perch/spring if you go this route) If you are having someone else weld it up, give them the angle you came up with. They better know what to do from there, or you should find someone else to weld it up.
No drive shaft around? Cut a piece of scrap metal (tube or pipe works best,..) about 2" longer then the distance between the yokes(or the yoke and flange, whatever,...) Get your big rubber hammer, and pound the nose of the dif. up until it is about pointed at the rear of the T-case. Set your metal tube or bar on the pinion nut. If you use water pipe that just fits over the pinion but won't slide over the nut, it works great. Set the top of the bar over the T-case yoke. Just lay it across the top. If it doesn't want to stay there,... duct tape. Tap the nose of the dif. until it is lined up with your metal bar. Measure the angle the dif. is setting at. This will be pretty close. If you want to get scientific, the actual aiming point should be the rotating center of the double carden joint. Measure from the yoke or flange at the front of DC joint to the center of the back u-joint on the DC joint. It will be 2 to 3 inches. Now use your imagination to picture the joint installed on the T-case. You can see that the rotating center of the rear joint is a couple inches behind the t-case. Run your bar up through this new imaginary point, and it will change your first reading 1/2 to 1 degree. If you want to drop your pinion to account for torque, you are right back where you started. (Told you it would be pretty close!) See above for welding
The CJ5 I did runs fine with no vibration, but it never sees the top side of 60. The -8 is driven by a total lunatic, and regularly hits 95. No vibration can be felt in either jeep. Then again, at 95, the -8 makes so much racket, the tires might be hopping off the road and we'd never know.
