BTW, Anytime a body lift is installed it allows you to move your gas tank upward that amount.
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Can't speak to the other questions, but I see no reason why it shouldn't be.
YouTube - 950+HP Toyota Landcruiser MoTeC by Kami
There's more than 1 person in the middle east getting 1k+ HP out of the 1FZ, and the transfer case takes it just fine.
Im interested in what you find, I may be in a similar boat.
I dont mean to sidetrack, but what would be really sweet would be a part time/full time case, where you could run 2WD, 4WD or AWD with selectable hubs (which I know your not doing).
In calgary we have snow and ice a good part of the year, and dry pavement the rest.
I will take some measurement in the morning when it is lite. I have a t-case and a tranny apart, so I can do this easly.