BL has nothing to do with the driveline. When you do the BL, a motor mount lift (MML) will lessen the amount that you need to drop the TC. The MML does affect the driveline. It also prevents having to modify the fan shroud. In my experience, a 3" lift even with the BL + MML still results in a dropped TC and the eventual need for a SYE/CV.
The only reason to "need" to drop the transfercase is to stop vibrations that sometimes occur with lifts. The amount of the drop is the amount needed to stop the vibration. It may be just a few washers or up to 1" or a little more.
2003 TJ, 33" BFG AT, 2" BL, 2" BDS spring lift, Truck Lite headlights, Homemade sunrider top.
How would i know how much to do, just play with it until the vibrations stop
For a 3" suspension lift and 1.25" BL + 1" MML you are looking at dropping it between 1/4" and 1/2". You can use washers to do that drop. If it turns out you need more, I have an unused 1" drop kit you can have.
Just Say NO To The Transfercase Drop. Please...Just Say NO.
License to kill gophers by the government of the United Nations. Man, free to kill gophers at will. To kill, you must know your enemy, and in this case my enemy is a varmint. And a varmint will never quit - ever. They're like the Viet Cong - Varmint Cong. So you have to fall back on superior intelligence and superior firepower. And that's all she wrote.
Last year I put on a 4" Old Man Emu on my TJ (got about 5" though) and put on the transfer case drop kit. I couldn't even drive it as the vibration on acceleration was terrible. On ebay I bought the Teraflex Extreme Short Shaft Kit and CV driveline from cjtatton for just over $400 delivered. Installed in a few hours and now drives as smooth as can be. I would recommend Curtis Tatton for his drivelines very nice guy and very nice drivelines. I recently had a CV failure in the driveline (my fault I never greased it, I didn't know there was a needle grease valve in it) Gave him a call and he said send her in I'll fix it for parts only and balance it too. Tatton Driveline Services 801-685-0056