The problem I see is that the rear output on the transer case will be angled slightly up.  This will required additional angles of operation for the u-joint.  It looks like you have an extended cab so you may have a long enough wheel base to make it work.  The more angle in the u-joint the faster they wear.  Also, you won't be able to match the pinion flange angle so you'll need a CV style shaft.

I don't consider a flat belly a DD type of mod, but I'm sure it can be done.