Ok folks this is my first post or reply to the site. I am thankful for the information. I will share some information that may be beneficial. You can think whatever you want about what I’ve done, but it was purely out of necessity.
I have successfully installed an 95 transmission in a 98 XJ. Following is as detailed a list of modifications as I can give.
First of all this XJ is a trail rig and is only driven to local trails or trailered to trails that are further.
The trans case had the casting for the ISS but it was not machines out.
I removed the pump and the overdrive hub, packed paper towels into every orifice and any crevice where filings could migrate into.
Pay close attention to how things come apart, take pictures and if possible have an exploded view diagram.
Measuring the outside diameter of the Sensor with a micrometer, I determined that a 19/32 drill bit would get me closest, but finding one in a rural community posed a challenge, so a 37/64 drill bit acquired from the local fastenal was the best I could do in short order and it actually worked out much better. The hole for the mounting bolt was pre-drilled and tapped, but would not have been a big issue if it wasn’t.
With the hole drilled, I test fitted the sensor several times and used the drill bit to take small amounts of material out of the hole for a good fit. This is delicate work with a heavy tool so take your time.
The transfer case adapter is different, so you have to swap those out for the newer style OSS.
Also the newer style counts 4 pulses per revolution the old style only counts 2, so the piece that slips into the output shaft has to be changed. This presented a different issue as the new one is wider than the old one, so I slipped it onto the output shaft and , marked the shaft to show where the snap ring needed to sit.
Again using paper towels to seal off any opening, I used a 4-1/2 angle grinder with a thin cutoff wheel and created the recess for the snap ring.
Installed the 4 pronged counter with the key and installed the snap ring, used carburetor cleaner and compressed air to clean the shaft and housing, re-installed the transfer case adapter, installed the wiring harness from the 98 transmission, installed a new filter, gasket and installed the transmission into the 98 XJ, filled it with fluid and test drive it. The Transmission works flawlessly.
Now before anyone starts hating on the way this was done let me say, if you have never been in a position that you had to have something done and ready to roll by morning, you will never need this type of information. I am a heavy industrial mechanic by trade and I understand the dangers of scoouring a hardened shaft. As for drilling the bing for the ISS, thaw sensor does not leak and I would challenge anyone to show me the detriment of doing this modification.
So in short, can it be done? YES
Should it be done? I would say that depends upon your circumstances.
I greatly appreciate the information provided on this thread and I hope this has been a help to someone else.