Well, the axles may stand up to it, however,if your pushing big rubber for a while, they do have a habbit of snapping the hub studs, and chewing out spider gears.
BUT this is usually due to the age. If you think about it, you have just spent the last 20+ years beating around the bush and then some kent straps 36 peds and a chev to ya......
If your going to run the 4 speed and you go for 4.88's you want to be running 36's to lower the rev's, and this is because the 35's come off the tourque range and it over rev's. Otherwise, giit a 5 speed. Forget about duel case's because 4.88's are enough....
If it has a 4 speed, check for a one piece T-case (easy to see, one peice has no split around it and is smaller), and if it does, think about an up-grade to a 5 speed with a split t-case out of a fj47. The one piece t-case housing is stronger, its just the inside components like smaller shafts and bearing that let it down. I have seen a 308 powered 40 with a SOA and 35+ tiers munch one pretty easy .
There is no need to go to a nissan diff's, because the weight just aint worth it. If you were going to be doing a comp each weekend, YEAH SURE, but of the average wheeler, its not necessary. IF you want nissan shit, buy one, and then have a cry because the front end shakes itself whenever you go over 60, and the powersteering box smash's itself off the chassie...
if your going to mod this thing, your going to need a budget of at least 5 grand. A cage is going to cost a fair bit (unless your going to build it yaself) You need to also think about new tires (36s are about $1500 and may come with rims) Start adding it up and the think, shit is there one out there, already built that is going to cost me the same??? Saves you messing around and you can get in it every weekend, rather than looking at it while its in the shed.
Look for rust, rust and rust. Look for oil, because some of those seals (haha its a sea lion) are going to need replacing. Compression test on the motor, take of for a long run and see what it does. When it gets hot (make it hot by flogging it up some hill) bring it back to idle and see if she miss fires. If it does, it could be up for some new leads, plugs, etc etc motor adjustments. Put it in 4wd and run it along a straight street. If you boot it in the variouse gears, and then take your foot right off, see if you can hear any whining and or grinding. It going to make a bit of noise, but excessive amounts are bad news.
Make sure she shirts nice and easy in the box, and if the steering is heavy, your going to need to do some work on that in for form of tierods, kingpin bearing etc etc
You going to need disks as well, and powersteering and more and more and more..... the list is endless
Think about it. Add up the coin and think, can i BUY one already done for the money. I have spend close to 15g on mine now, and i have been there every step of the way and next time, im going to buy one that's already been done. I know how it all works and im not going to spend another 5 years under it buildin em up.
Trust the way of the Dumbdunce, because he is king of all toyota