Thanks for your thoughts!
Andreas, I'm happy that what I've been expecting is pretty much exactly what you've said. I'm not really worried about the resale value. One of the reasons we bought this 4Runner (almost 3 years ago now) is that we intend to keep it until it gives up the ghost, which is why I want to increase its "utility". I know that these aren't exactly rare vehicles, though at the same time I've been watching the local For Sale listings (Albuquerque, NM) for about three months now and I haven't seen a single '96-'99 4wd 4Runner (newer than that they're all over $20k).

Regarding a source vehicle: obviously the ideal case would be a "lightly rolled" 4Runner, but would a Taco work? How similar are the drivetrains?

Regarding the ARB locker idea: could I instead try to find a Toyota-stock electric locker? (I don't remember what they're called) In other words, would that be adaptable to my rear (i.e. just change centersections), or could I just swap the axle assembly? That might be a short term solution. Is the electric locker simply actuated by a dash switch, or is it more complex than that (i.e. controlled by ECU or some other on-board processor).

I currently don't have ANY traction control features (ABS, VSC, etc).