The 258 was the factory offering. A 4.0 would make this effort much more worthwhile, though.

Keep in mind that the 4cyl T-5's had a different spline count (and diameter?) on the input shaft. Clutch kits for the 258 won't fit.

 

I am finding 4.0 Cherokee's every day for less than 1500.00 and that would be a good way to get a lot of parts for cheap and scrap the rest. You also have the advantage of driving before you buy.

 

You will need :
Radiator
Fan shroud
Maybe the fan
Frame horns (The holes in the frame are same location)
Engine mounts
Bell housing - the AMC 150 bell housing fits only the AMC 150. Mount holes will need to match the trans if you swap trans.
Transmission with correct input spline count or custom clutch with correct spline count to match the 4 cyl trans, or rebuild the T5 with a correct spline input shaft.
Clutch master and slave or manual setup with addition of manual clutch pedal.
Drive shaft length mods unless you swap trans to a T176/7
Shifter cover (hump cover) or mod to your current one.
Accessory brackets (PS,alt) will swap over form the 4 to the 6.

 

Thansk for the info. I guess a whole donor vehicle would be the way to go.