Doc, I think ur crazy! 4.0 in ur waggy?! What's it got now? I know eights NOT great...on gas, but done right you can have gobs of torque, decent enough mpg, and streetability. I would think the 4.0 would be under powered unless stroked to 4.6 or 4.7, can't remember which it was. Your waggy is awful heavy for the 4.0 isn't it?
A stock amc 360 V8 makes something around 140HP, and about 280 Ft. Lbs, these specs are from a 1991 Grand waggy.
A stock 4.0 makes 180HP and about 240 ft lbs.
The old wagoneers and j trucks and cherokees had the 6cyl as an option, the 4.2, which most likely made less power than a modern fuel injected 4.0 drivetrain.
A 4.0 wouldnt be bad at all, some people make the swap. It'd be pretty cheap considering what you need to put into a 360 to make it break 12 or 13mpg, and thats even tough to acheive without throwing about $1500 in fuel injection onto the thing.....
Big old inefficient engine. Ideally I'd swap in a cummins 4bt, but thats another spendy endeavor. I'll likely just rebuild the 360 sitting in my garage if I ever get the bug, thats the engine that came in my waggy.
Weird thing was that I went and bought another engine because that one was starting to have issues, just to hold me over while I rebuilt the old one. The newer one runs like a charm! Starts up way faster, makes zero noise, and the oil pressure is awesome on it! (55psi @ 65mph, the old one would be about 25psi @ 65mph). The crazy part is that new engine im running is a 1987 and it has like 150,000 miles on it.