putting a wrangler 3 speed in place of an aw4

An AW4 is plenty strong and very little ever goes wrong with them. I wouldn't spend the time swapping unless your AW4 dies. No sense swapping a perfectly good tranny that probably 95% of XJ guys (not counting stick drivers) run and have no problems with.
 
I'll be honest Jim, as good a trans as the 904 for is, it would be better to stick with the AW4. It's a fine trans with an excellent reputation for reliability, even when abused. If you need a trans that can put up with stupid amounts of power and abuse, it would be great, but on an otherwise warmed over XJ, I wouldn't bother.
 
If you really want a three speed, use the 727 torquflight. If i rememger correctly. the 4.0/4.2 blocks have the same bolt pattern as the AMC v8s which means you could install the driveline out of a Wagoneer. The real Waggy, not the XJ version...
 
Keep the AW4. If you really want more performance, i think swapping a valve body from a Supra will do the trick. Not entirely sure about that...
 
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