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I believe the LQ4 6.0L should be mated to a 4L80E. I have that driveline in a 9,600 lb GVW GMT800 2005 Silverado 2500HD. I'd make darn sure it's really a 4L65E before you give up on the transmission. The 4L80E is exceedingly heavy duty, on par with the TH400 it's derived from, and far better suited to the HP levels you're shooting for. If you have a 4L65E you can find the LS mounted 4L80E in the GMT800 2500HD pickups.The TH350 and that generation of smallblock transmission will need adapters to bolt up to the LS motors and it will really tick the PCM off to not have a transmission to control.In a nutshell... if it's a 4L65E or 4L80E you don't have to play "fool the PCM" and find the TurboHydramatic engine mounting adapters and the 4L80E is a heavier duty transmission than a TH350. Even the 4L65E is heavier duty than the TH350. 400 HP sounds nice but the 300hp and 360ft/lb reliable stock power levels of the LQ4 engine is more than a serious upgrade over the old 155 hp 350 smallblocks. The mechanical difference between the 300hp 360ft/lb LQ4 & the 345hp 385ft/lb LQ9 is the pistons. Re-program the PCM and you're more than double the old engines' output.You can adapt the LH drop transfer case bolt pattern on the transmission to mate a RH drop chain drive transfer case to the 4L80E... NP208C or RHD NP241C. Supposedly an NP261 exists that is setup for Right Hand Drop but I think it's a mythical creature... if you can find one and prove me wrong... that would be an ideal transfer case for a squarebody. You can likely bolt an NP205 to the 4L80E as well but the NP241 & NP208 are lighter and have a much lower Low range... 2.71:1 in the 208/241 vs the 205 with 1.96:1. Contrary to popular opinion they will put up with a fair amount of abuse as long as you keep them filled with clean Delco 10-4033 oil or Dexron III compatible ATF. I plowed snow with an NP208 for years that was coupled to a 460 and C6 in an F250.You could also research the LH pumpkin Dana front axles and possibly keep the whole Denali drivetrain as is... Not sure what all would be entailed in swapping the pumkin to the LH side. and it may not be possible... Just a thought.
The chain drive transfer cases will mount to the 4L65E the same as the 4L80E. I'd seriously consider building the 4L65 rather than a TH350. Much easier to just go with the engine/transmission combo the PCM is already equipped to handle. More importantly you aren't giving up any HP/torque handling by using the 4T65E.