Are you sure we're not getting cases mixed up here?
Your username has '84 in it, if you have an '84 that t-case would most likely be a NP208 (depends on trans), and the '79 with a TH400 could definitely have a NP203 behind it.
Either way, the NP208 is the weakest transfer case that came in a fullsize solid axle Chevy (though they aren't terrible). The NP203 is probably right behind it.
If you want 35's, a 4" lift works great.
The only reason to go higher is to avoid trimming fenders but the OEM fenderwell really won't fit more than a 33" tire without trimming. That means either lots of lift or moderate lift and a little trimming.
