I'd recommend a Ford Explorer 8.8 swap with 4.10 gears - no one here will recommend that you put any money into a Dana 35. You can find Explorers with 4.10 gears, so you won't have to mess with the gears in the rear axle.
Yes, you will have to find a Dana 30 carrier for 3.73 and up gears. Or find a donor Jeep with 4.10 gears and just swap in the entire axle.
When you look at the costs of the gear swap, I think you'll find the entire axle swap to be a better option - especially if you can weld, or if you have a friend that can weld. Or a local Jeep club.
My Ammo Can Console: http://www.jeepforum.com/forum/f12/yet-another-ammo-can-project-finished-1498520/
My 8.8 Swap: http://www.jeepforum.com/forum/f12/yet-another-ford-8-8-swap-extras-1565339/