Thank you Marlin for your response on this idea.
I was sweating having a 12" rear drive shaft and had to do somthing. If it wasn't for using a diesel engine with the starter on the wrong side I would have just used the cast iron trans.
I am looking at cutting the tail shaft housing down and welding it back together. There will be only about 1" for the shifter shaft to slide back, but I am thinking of drilling a hole in the transfercase to allow the shaft to move back enough to work properly without comming in contact with the gear set.
More pictures to come as I progress.
Mark