Ok, well my swap is complete. I took it to my mechanic and he drained the oil, heated the corner of the pan, and peend it in. The oil pan wasn't even removed. It clears with about an 1/8th of an inch. No pan leaks and I have about 400 miles on it. No clearance or hitting issues. So I would suggest this route to anyone looking to do this to their V8 explorer with stock suspension.
Note that the manual states to add 5 OZ of gear oil to the CAD housing through the vent plug prior to installation. This is to insure it works properly and doesn't lock up on you.
After I got it back from my mechanic, I had to do the rest of the wiring / hose routing. The fist thing I did was find a good home for the solenoids. The higher up you mount them, the better shielded they are from road derbies. I chose a spot on the pass side next to the radiator. It's up fairly high and shielded on two sides. Its also at a good spot to reach the vacuum ball.
On my 2000, the vacuum ball is mounted atop of the pass side wheel liner, unlike the 95 I removed it from where it had it mounted in the engine bay. you need to remove the wheel liner to get to it. The 95 & 96 vacuum balls have an additional port to accommodate the vacuum line that feeds the solenoids. 97-01 models will not have this and cannot be used.
The next step was to find a 12V+ source that is hot only when the ignition switch is in the run position, since the solenoids require constant 12V+ power. Lucky for me, the 2000 has an auxiliary relay box less than a foot away. Looking at the wiring diagram, there was one wire that wold work. It was the front washer pump relay feed. It is a white wire with a black tracer. It is tied to a 7.5 amp fuse. Just for kicks, I measured the current draw on the solenoids, and they were about 165mA a piece, which is next to nothing. So they would work with any size fuse.
Next step is to wire the plug like the others on here have outlined: purple with orange tracer to 12V+, blue w/ yellow tracer to 4x4 activation (ground source), and pink w/ black tracer to 4x2 activation (ground source).
Lastly I installed a switch to control it manually. It's simply a ground source switch connects chassis ground to either 4x4 or 4x2 ground source.
I'm pretty sure you should not try to activate the CAD 4x4 while the vehicle is at speed. The OEM setup uses an electromagnet clutch inside the transfer case to spin up the front drive shaft, then the GEM commands the CAD system to shift, since at this point the axle and intermediate shafts inside the CAD are spinning at the same speed.
Overall I am very happy with the swap. I gained a solid 1.5MPG improvement, but more importantly the Explorer drives so much more smoothly. I would highly recommend this swap!
Brandon