Yes you are correct. Do you want to run 3.70 gears? You can install your 3rd into the disc housing and keep your 4.11's, if that's what your rear is. What yr is your 40? You can change your rear to 3.70 and use the 3.70 frt. It depends on what your going to do with your 40. If you do this you will probably have to get new pinion flanges to match your drive shafts. Frt 3rds usually have low miles on them. If you decide to change the rear you'll need ring and pinion, shims, bearing and a pinion yoke. I'd setup new. New pinions will most likely be fine spline, your 4.11 are not. Shims and bearings are usually sold as a kit. You could also try and find a used 3rd. Once you pull the frt axles and knuckles your just 10 or so nuts from pulling the 3rd. Or just adapt these knuckles on your housing. You'll have to slightly grind the inside of the ball so the late model birfs fit into the housing. Its No big deal. Like I said, you'll shouId service the knuckles anyways. This is probably the simplest.