I also am running the 5.86 gears in dana 60s but not sure how itll act with 5.3 and th350 with 203/205. I had them in a 94 tracker with the 4cyl and duel tcase with a 160:1 final crawl with manul trans before.
Great in the rocks, If it's flat and medium sized rocks, I just idle over them in low/low 1st gear bumping the gas when needing to bump over something. Need a little wheel speed to get over something big, you still have 2nd and 3rd gears on the trans or hit high on one of the cases.
The main reason for me going this low is...I hate steep down hills!!!... It will keep you off the brakes and gives you more control ( Tires are turning not locked and sliding ) Also having an auto in this situation helps a lot too, you can change gears with out ever free wheeling when hitting the clutch.