Do a search for OneTon's rig. It's about as buggy as you can get and still have some XJ left.
As far as engine swap: complete 4.0 drive-train wouldn't be that hard, but if you are going through the hassle (and don't have to worry about emissions for an off-road only vehicle), I'd go 5.0 Mustang engines. Keep the fuel injection.
From there depends on if you want stick or auto (personal preference). I like autos, and would do C4 or C6 (if you can find small block C6 bell-housing). You don't have to worry about overdrives. For a manual, there are a ton of options. Some with really low granny gears plus first-third.
Depends on $ as far as t-case goes. A few good choices would be D300, D20 and of course, Atlas.
Go 60s front and rear. If you don't go over 37s, a very well built 44 front will get you by, but usually, by the time you build a custom D44, you are over the 60 budget (you can get a 60 complete hub-hub with 4.56s for about $1000, just add a locker and you're good). You could also be real creative and go Unimog/Volvo portals. Plan to spend $2500 for front and rear just to get you in the door. If you do portals, stick with the 4 popper,stick, and 231, the portal gear are really low, and the 4 cyl will have enough power. It may be the cheapest option once you start looking at built 60s, new power plant, etc.
Do plenty of homework on link suspensions. Check Pirate and look at the 'God of Suspension' thread. Also Beezil started a pretty complete rear suspension thread a while back and I started what ended up being a pretty long front suspension thread also. It takes a couple books of graph paper to figure out your link suspension. Don't just through together a long arm. Long arms actually suck. So many people have to put limiting straps (band-aid fix) on them because the nature of a radius arm setup gives anti-dive (front) or anti-squat (rear) numbers that are through the roof and cause the suspensions to unload during a climb or descend. Design a proper 4 link rear (Beezil, OneTon), and 3 linked front (either 2 lowers and a wishbone upper [Beezil], or 2 lowers, one upper, and a track-bar [Goatman]). Don't forget, ground clearance is your friend.
Build the frame strong, but light. Use tube and triangulation (look up OneTon and Beezil). Also, check on Pirate for ideas on tube chassis.
Should be a really fun project. Someday I'd like to do one too, but that's way down the road.
Steve