Loco.......I have an 81 Cj-5, 304, 4"lift w/ 33's
I agree with some of the posters above about the lift height.....4" with 33's is the highest I would go for a street/ part time off-road Jeep.
So far I have not had any real issues with my 304. Just routine maintenance, and a few basic parts....The motor has plenty of power, but without the proper gearing it may feel a little sluggish even with 33's
If you have the AMC 20 rear end, you will not be able to run even a 33" tire for very long...the axles just cant handle it......one piece axles will be a necessity.
Also on the lift....The CJ-5 drive shafts are pretty short anything over 4", i think, is going to cause a few other issues for you to deal with. You definitely need a rear brake line, transfer case drop....and with a body lift going higher, you'll probably have some clutch linkage to deal with....there's probably some things I'm missing , but I'm sorta new to this stuff.
Also, from my experience, getting a lifted, large tire CJ to go down the road straight is one thing, but getting it to safely stop in a slight turn on a windy day, at highway speeds is another issue.
If your a tall guy the CJ-5 is going to be a bear to comfortably get into and sit behind the wheel...I'm 6'6" tall and couldn't even fit in the Jeep to load it on the trailer when I got mine. I wound up cutting out some of the drivers side rear fender well, and moving the seat back about 4".....with a little creative sheet metal work, it turned out pretty nice.
I was on a pretty tight budget building my Jeep, without having access to a full machine shop would have forced me to spend a lot of extra $$ so.......
I'm not sure where you are in Texas, but if your in the Austin area, and need some help fabricating some things, welding, sand blasting, access to drill presses and other equipment to help keep you in your budget, shoot me an e-mail, I'd be glad to help you out.
My e-mail is firstname.lastname@example.org
Good luck with you project.