Are you sure the Defender transfer case will not fit? I have a mate who put a Deefer tfr case into his D2 - straight swap, no drama's.
I run 265/75's (and have done for 11 years on a D2 and now D2a) and have not changed the gearing. Slight loss of power and harder on brakes but I like the lower cruising rpm's and lets face it, we do a lot of cruising in the vast country of ours.
That being said, I run two sets of tyres - one set with standard tyres.

