Chad, Welcome to the wire. You'll find tons of help and advice and inspiration for modding whatever truck you end up with on this website. I'm a Montero fan, I've owned two Gen I's, still have a 89 shorty and just bought a nearly new 05 Gen 3 w/ 30k miles. I have driven a family member's Gen 2 several times and lots of dudes on this forum own them.

I would ask what are you thinking of using the vehicle for? As you pointed out, Gen 2's are hard to find especially with low miles, reliable, good condition, etc. They do come up once in a while though. I think the Gen 2.5 are my favorite body style 1998-2000 with the flared fenders making them even more hard to find. Sounds like you already know, the Gen 2 is built on a frame like a truck and is probably easier to throw bigger tires on and wheel, maybe a little better clearance for off road and departure angle seems better to me. They are nice trucks for sure if you can find a good one. I don't know exactly which years lockers were standard or available. I am pretty sure any SR model came standard with the rear locker, at least every one I've seen at the junkyards do.

I went with a Gen 3 because the vehicle is for my wife to drive (when it ages it will be my upgraded adventure mobile) I wanted a newer one with low low miles hoping it will be dependable for a good while and since they are not importing them to US anymore, I wanted to get one of the last new ones. The Gen 3 is unibody construction from what I understand it is a little more of a stiff body(as far as flex) but the suspension is great with IFS and independent in the rear as well. It really does ride better on the freeway, bumpy roads etc. I gotta say, after driving my wife's on a 500 mi trip I was sold and want another one for me. Too bad my Gen 1 is so nice I don't want to get rid of it either. Personally, I feel like the difference between gen 2 and 3 off road is negligible unless you want to get real hard core. WIthout a lift you can only go up about 1 tire size, which is equivalent to a 32" tire. ARB offers a 1.5" lift which would easily allow a 33" tire, they still offer bull bars for all generations and I would imagine you can get a locker at least rear if not both. I think the Gen 3 feels more stable in stock form compared to the Gen 2 as far as cornering etc. and the newer ones come equipped with traction control which is nice. I've only tested it out on snow so far but I've heard it works well off road.

I'm sure others know more about this than I do but I was told by our local Mitsu dealer service manager that the gen I's and 2's used a mopar based engine and the later model 03 and up 3.8 liter actually have a Mitsubishi engine which makes me feel warm and fuzzy inside. Most Gen 2's I see for sale have a bad engine or engine issues - another reason I went with the later model Gen 3. I'm not saying I wouldn't buy a sweet Gen 2, just something to consider.

Well thats tons of info sorry for the long post, just trying to help. I just tried talking my little brother out of dropping 25K on a used high mileage Yukon and going with a Monty with much less miles for 18K to no avail. but I personally feel like they are an amazing value and a great vehicle compared to most others.