I have done what you mention and Im happy with 2" exhaust.but I think EB sugest 2.25 only from the mufler back.I think Im about as good as Ill get from a high milage 4cl engine.I like EBs timing kit with the steele guides.4-5hundred bucks for a timing kit is too steep for me.I did the oil pump and water pump while I was in there and still had less than 200 bucks in it all if I remember right.no rock crawler but I drive the hell out of it elsewhere.

oh what a feeling:
#1 86 xtra cab 22R,EB 261 cam ,Hooker header,2" ex with cherry bomb, Aussie powered
#2 86 sr5 4x4 efi parts truck
#3 87 2wd parts truck
84 supra yard art