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I just did a similar swap except I went to a 700R4. Your NP205 has a 10 spline input shaft , so you would need to install a 10 spline output shaft on the tranny. Keep in mind though to swap to a TH400 the TCase has to be machined to account for the larger bearings on the input shaft, but a Th350 with the right output shaft and adapter would bolt right up.
Mike didn't you have a 2wd blazer? BTW I saw that blazer on ebay...I'm always lookin
If you're going to be using it as a daily driver the 700R4/208 is the best choice. You could probably buy a parts truck with that driveline dirt cheap giving you everythign you need.