Started out with a 6.2 diesel and 700R4. First thing that happened was a previous owner pulled the 6.2 and put in a 350 out of a '69 Impala. That setup was 'all right', especially after I got rid of the jerry-rigged electrical system and put in a take-out harness from a junked Suburban.
The 700R4 puked on me, leaving me with only first gear to motate with. I put in a Turbo 350, with an adapter to keep the original driveshaft lengths. This all went well for about another 10K miles, then the transfer case decided it wouldn't shift into anything but Low 4.
As to the tranny swap, the 350 does not have as low a first gear as the 700R4, and no overdrive, both assets that were sorely missed after making the swap. If you're dealing with an original '82 700R4, I'd really, really, really consider going with a later tranny of the same configuration!
If you go to bigger tires, you'll WANT the lower first gear just to get going, and it's a plus in the muck and snow when you're grunting around.
I've run an original 700R4 in an '86 1500 Suburban 4X4 as well as another 1500 pickup of the same year, and they've held up to some serious grunt work, both nearing 250K with regular fluid and filter changes and adjustment on the TV cable.

 

I know this is an old post, wondering how you made out. and added my 2 cents
Except for gear ratio changing of the axles to compensate for larger tires, with 6" suspension lift you probably want to get both driveshafts lengthend about 1.5". I did this on my '85 Stepside. 4" lift in back and 5" in the front to level it out. with 35" tires it looks proportionately correct.
It's been running fine that way since I did the Lift back in '86. In 300K miles and only had to replace the 'u" joints twice.
3 years ago I put all new fenders, doors and Steps on it ..new paint and bushwacker front flares.

 

Hey. Yea everythings in now... They said they cut the drive shaft and slid it into a metal pipe and welded it on... It seems to be working alright. The front shaft stayed the same length. I had to get new, bigger transfer case mounts because the Joint for the front drive shaft( comming out of the Tras. Case) was rubbing just a little on the crossmember, causeing a clunking/ticking sound... other than that just the extended break lines, drop steering arm(Included in lift) and had to make two sway bar drop mounts out of square steel tubing.. sorry as i might be forgetting a few little things, but we all forget some stuff.. but that was the bigger things.