ChryslerChris

3.21 gears with 35's will be a chore. Most 35's are wider than stock along with taller. Trying to spin four of those on those gears will be more detrimental than not. The reverse is actually truer. Going to a higher ratio like 4.8 or, 5.13 allows you to stay on overdrive more. With a 3.21 gear you'll find yourself frequently downshifting especially when accelerating or on inclines. That in fact hurts your mpg.

Altas transfer case or not, your axle gears will be what drives your mpg numbers the most.