Your old 2.9L probably put down 90 or so horsepower, so dont feel too bad hahaha
A 2wd Ranchero my buddy has with a 96 Explorer GT-40 drivetrain put down 205 RWHP I believe, with just headers. His rear end gearing is all jacked up so he couldnt really push it that day, all he has going for him is a low mileage explorer V8 and trans, shorty headers and 2wd. 205 is not bad at all for a setup like that.
I figure with TM headers, intake spacer, intake, good exhaust setup, engine in a good state of tune, 1350 style t case and 35" tires you will probably be in the same neighborhood, 200-215 RWHP max.
thats plenty for a BII, and of course with a EFI 5.0L already under your hood, the sky is the limit.
In the snow last week I got the BII stuck, with both lockers on, the 1354 T case in low, truck in 1, 4.10 and 35" MTR's I got out to air down the tires. What I forgot was I left her in 1, idliing. All 4 tires were just slowly spinning, sliding on the ice like hockey pucks ( I was stuck good). It looked just like a tractor. That 5.0L has plenty of juice for your BII, if you want more I suggest a custom mild cam, roller rockers and a custom tune/dyno session next
After you re-gear and get some strong axles under your bad ass BII