I have a 2ncd gen, 1999. I removed my engine to replace the timing components and re-installed it. I do not know how much difference there is between the 2ncd gen and 3rd gen, but on mine, there was no reason to completly remove the transmission, let alone touch the transfer case or driveshafts.
I simply supportted the trans with a bottle jack, and unbolted it (torque converter must be undone from flexplate through starterhole also) Un-bolt exhuast from headers, (repeatedly soak the bolts with pb blaster for a few days, makes all the difference). It was necessary to remove the radiator on mine, made a ton more room to work for somthing fairly easy to remove.I detached the Power steering AND A/C pumps together as a unit, and did NOT undo any of the lines, just set them off to the side. Then its just unhooking wires, vaccuum lines, fuel line and things like that and paying attention as you do it. When you've checked 5 times, connect hoist (after removing hood), add tension, undo motor mounts AND plates, and hoist away.
OH!! Make sure you remove your OIL FILTER before you attempt to remove the engine, this gets snagged and is a huge pain in the ass to get off after its already damaged and leaking oil all over the place... ask me how i know....

I was warned of this by someone and i still forgot to do it.
IF you have the time and are not rushed, it really is not incredibly difficult if you pay attention and label/organize bolts and wires etc.
Below is a link to when i did my removal, and replaced timing components. However, it is by far NOT a step by step. But it may help you, and STREETROD has an incredible knowledge base of the 4.0 SOHC.
Good luck!
http://www.explorerforum.com/forums/showthread.php?t=300579