firstly you need a 200 block as the front diff mounts to the sump and puts added stress through the block in certain areas meaning its not a good idea to use a 205 block.
Secondly the geometry of the front chassis legs/strut tops etc... is same on 2wd and 4x4 sierras.....so if ford thought they could get away with knicking the edge of the chassis leg why would they have half mooned it?? It's because if you hit full compression on your shock or you break a spring the shaft will hit the chassis leg possibly causing damage.
Knight7660, you have a lot of useable parts on the xr4x4, there are quite a few subtle differences between gen cossie 4x4 stuff and xr4x4 stuff but majority will fit....the 2.8 xr4x4 yeilds less parts than the 2.9 or the 2.0 versions.
Here's a list of bits you can use, bits you can't and why...
Diffs....the 2.8 diffs are same ratio as cossie IIRC but the front diff housing is slightly different (minutely around seal area meaning it will fit but leak

) but as far as I remember the rear diff is good to use....so to complete the diffs you'll need to check the 2.8 rear diff ratio and get a cossie 4x4 front diff or a 2.9xr4x4 front diff.
Gearbox....The 2.8 version of the mtx5 is essentially the same box as a cossie 4x4 box but has a different bell housing cast into the casing so unfortunately not useable (good for spares though so don't throw away...internals are very similar, vc is same etc..) the box to use in this conversion would be a 2.0 dohc xr4x4 box (you need to change the clutch fork and pin..both are available from ford still or I have a few knocking about if you need)...the 2.0 dohc box can be gotten for £50 ish on ebay and will not have had more than 130bhp put though it wheras cossie boxes cost £150+ and have had hard lives so I recommend the 2.0 dohc xr4x4 box. You'll need to make up a gearbox mount as there's not a ford one that'll fit the conversion you're doing.
The 2wd rear end of your car can be left as is, no need to change anything as the difference in ratios is 0.02 IIRC and changing to the xr rear end would be a downgrade in strength (smaller diff, shafts etc..) plus the arb pickups are different so it means welding.....if your 3dr is not a cossie then please describe the rear beam setup in it atm and i'll see what you need to change.
Front suspension/drive....The front x-member and susupension/arb will all bolt up fine and work ok, the only issues I can invisage are that the xr4x4 racks don't have a lock limiter like cossies do to limit steering angle....so if you use certain offset wheels you may get them scrubbing on the chassis legs (you can use a cossie rack no problems theyre dimensionally the same), you also might have to experiment with which steering linkage to use as I have not done the conversion into a 3dr.
The front hubs are the same bar the caliper mounting lugs again...you can use the xr4x4 front brakes, swap the hubs to cossie ones or have some sort of mounting brackets made up (ideal if your going to have big brakes). both xr props are useable, as are front shafts.
Mods to shell....Right so we've already established you need to cut out half moon shapes in the front chassis legs (listen to others saying its not needed at your peril) next you need to give the gearbox tunnel some more room for the bigger box...you can do this either by hammering the tunnel or welding in a clearance section of the xr's tunnel (bulge on drivers side front of tunnel).
Think thats all but I'm sure to have missed something....can anyone else confirm??
Cheers
Dan