R2.8? I know this is gonna be controversial, but that motor is a waste of money. 8.5K for a motor, 1,250 for an adapter kit, and 160hp/310 pound feet of torque, and you still need a transmission. People say its max power is just about 185hp and 350 torque. That's a whole lotta money for a 700 pound hunk of outdated technology. I hate to say it, cause I fully wish I could support Cummins, but my money goes where its more practical. The R2.8 is a slightly updated 4BT. Look at the M57 platform. It has plastic parts on it, and that sucks. I hate plastic. But the damn thing will do 400hp and 500 pound feet of torque without doing anything but exhaust and a tune. Wanna pull 6K RPM? Throw in some stiffer valve springs. Stock US engines came with a variable vane turbo. People say its pretty reliable, I have no clue in reality. I do know I can throw a compound turbo on it and pull serious power just off idle all the way up to 5k with all factory internals. I'm not looking for that kind of power though. I want a clean and smooth running engine that will allow me to pull all the Colorado passes at 80mph with out going below 4th gear. My JK struggles with just 35's. When I go over Vail pass, I'm rowing all the way down to 2nd gear and holding 4500-5k rpm. I live in Colorado but do a bunch of wheeling in Arizona and California. I'm hoping for a solid 300hp and 400 pound feet of torque. That's should do good when you consider its roughly the same weight as the 4.0.
I know a XJ on 37's and 1 tons wont ever get good mpg's, but I wanna shoot for something higher than my JK gets. 1000 miles in fuel adds up quick.
Right now the Jeep is bone stock. This will be a slow build, but I think it'll be worth it in the end. I'm still in the collecting parts faze.
To answer your cost question, I think I can do the entire swap, with an AX15 for about 6.5k. The M57N2 is pretty hard to find in the US though. They're out there, but I don't think I'll be finding one in the local junkyard.