I don't really follow your description of the setup you've got, but I know about the 4.0 auto situation.
The 4.0 needs the tone ring that is attached to the 4.0 flex plate, so the computer can figue the timing advance/retard via the CPS. You will also need an auto (TF999) that can accept a CPS, or I also hear that older 909/727's can be modified to accept one.
Determining if you have a HESCO relocated CPS: Look at your crank dampener pulley. If it has grooves/notches in it, and a little, round black thing mounted along the oil pan on the drivers side, then yes, you got lucky. It'll look like this:
An '87 YJ stock had, if I recall, a TF 727 trans with either a NP205/231 t-case. Im sure someone will correct me if I'm wrong.
1995 YJ: 4.0, 700R4, 231 C/J case, TeraFlex SS SYE/CV shaft, 8.8 with 3.73 gears, 136 Amp Alternator, Trans Cooler, Pavement Ends Flip-top/H-T, 2'' BDS Suspension Lift, MORE 5/8' Greasables, Sony GT-210 Xplode Head.
Under the Knife! See the build thread: http://www.jeepforum.com/forum/f12/badaddetudes-build-project-hrp-602142/