Which engine swap would be best for me? (5.3, 6.2 diesel, other?)

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I sure wish I was nearby! You say not to do a swap for economy or range, but I don't see how my girlfriend's 2005 5.3 Tahoe can get 15/20mpg, or a 6.2 suburban can get 20mpg+, but our cruisers with the same drivetrain can't. Maybe because of the AWD?

A 6.2 Suburban got that power with what would be considered today as an extremely underpowered engine. A FZJ80 would feel like a sports car in comparison. I had a 6.5L turbo 1500 4x2 Suburban for awhile. Tops I ever got out of it was 18mpg. That truck had the tallest gears available with a GM diesel at the time. It was about as quick as my 80.

One of the factors in eliminated the 6.2/6.5 series diesel was the fact the gen III V8 achieved equivalent mpg numbers along with greater power and better reliability.

The AWD is definitely a large factor in the poor mpg of these trucks. While helical gears are very efficient, they are not 100% efficient. Each gear pair that the power has to be transferred through eats up power, and the effect is cumulative. For arguments sake, lets assume 98% efficiency, which is a very good gear set. The 80 transfer case has two gear pairs transferring power. 0.98*0.98=.96 or 96%. Or a 4% drop in efficiency compared to a New Process transfer case used in the majority of domestic 4X4's, which has a direct power transfer through the transfer case.

Another aspect of AWD is all the additional mass that you have to power. There is a lot of drag in a solid axle, so double that when you are spinning everything in the front axle.
 

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