Fuel efficient cherokee

I am redoing a 1983 Jeep Cherokee to use as a daily driver.  I like the body style and the idea of driving something other than the run of the mill SUV.  I will only be using the 4 wheel drive for possible snow and off-roading when I’m tracking down fishing spots.  My main goal over all is the fuel economy and not the off-roading.  I have 3.07 gears, both front and rear in Dana 44’s.  I want to replace my engine transmission and transfer case with a Chevy setup out of a newer model 4x4 for the better fuel economy.  I know that I want ether a 5.7 or 5.3 V8 with a 6 speed automatic transmission (6L80).  I hope to be able to use readily available modern programmers to help get the best MPG possible. Here are my questions.

1. Should I put lower gears in the front for better traction?
2. Would that affect the MPG or not since it spins free unless engaged?
3. Is there a better setup for MPG then the V8 and 6 speed auto?
4. V6 uses less gas but would it be a dog with the Jeep at 5000lb?

I know these aren’t you normal “How can I make it bigger and badder” questions, but I have muscle cars for that.  This is just a cruiser with 4 wheel drive.  

KSU, ok man, wow.  Obviously you realize that the project you seek to start will cost a lot of money, so I won't even touch on that.  However, since you have probably already thought about money, and are willing to spend lots of it on this swap, I would recommend a diferent powerplant altogether.  If you are seeking good fuel economy, then I would look into a Cummins diesel for that cherokee.  A 4BT (the motor used in delivery trucks before they put the 6BT in the Dodge pickups) would be my choice.  It uses 100% mechanical fuel delivery and was never as hopped up as the 12 valve and especially the 24 valve that was put in the pickups.  With that motor and a mildly built 4 speed auto tranny behind it, you could easily stay with your stock gear ratio without any power problems at all.  I know this probably a little outside of the box for you, but it would be a great rig.  I know a guy up here in WY who put one in a late 70's Toyota FJ40 LC and he reliably gets well over 30MPG all the time.  It would get great fuel economy, last forever, and maintenance costs would be lower as well.  Diesels do not require spark plugs, wires, distributors, caps or rotors to be replaced.....ever!  

Please do not cross post the same thing 7 times.  I deleted the other threads.  
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02 TJ with lots of extra junk

"Respect my authority"  (cartman)

i think it would be cheaper to buy a grocery getter and use that as a daily driver  
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You know I love you all (in a manly non sexual way) Spawn_X

1986blazer:
i think it would be cheaper to buy a grocery getter and use that as a daily driver

By a long shot.

I'll be blunt. If the only reason you want to do this is for fuel economy you're stupid. No other way to put it.

Even just to purchase the engine and trans you are talking about you are looking at about $2,000. For $2,000 you could buy (at the going rate in CA) 784 gallons of gas. That's a lot of gas. And that is just the purchase of the engine. Say this whole experiment sets you back $5,000 by the time all is said and done, that's 1,961 gallons of gas.

So is it really worth it?

My vote, buy a $500 Honda as a DD and keep the Jeep as is for fun.  
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Long Travel 4 Wheel Drive - The Best of Both Worlds!

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Thanks to everyone for taking the time to discuss this.  As for the money I have a friend that owns a salvage yard so he is keeping an eye out for the drive train and he owes me one.  Yes I agree that this (fuel economy) would normally not be the way to go with a jeep the shape of a brick but I have always driven older vehicles and intend on keeping this for quite a while pluse it has character.  Thank you though for all the advice and keep it coming.
Also does anyone know of a good parts catalog for the 14-83 Cherokees?  I was hoping for something like the LMC and National Parts Depot books but I don’t believe I will be that lucky.  

74-83 cherokee not 14-83