"I'd like have an automatic transmission that uses the TOD, but I'm not sure the stock transmission will handle the torque from the diesel engine."

The TOD is probably where we lose so much of our efficiency (gas mileage). I like the TOD so would probably keep it too but if your main goal is improved efficiency, you may want to consider swapping to an operator selectable transfer case.

If you're going to keep the TOD, I'd keep the tranny too. As long as you won't be pushing the beastie to the limit, I don't think the torque will be an issue (IMHO).

I think I'd be worried more about the computer. How in the 1134 are you going to handle all of the sensor outputs??? I'll be the first to commend you for going green but you're biting off more than most of us would be willing.