Well, my guess is that you will have just placed "more" pressure on the D35, by nearly doubling the 'torque' into it, if you put in the TeraLow.
Now the reason we are pointing this out is the D35 rear end is pretty notoriously weak and a "must have" for rock crawling is to replace that axle first.
Now I realize this is an 04, and it sounds like a lot of work and "hard to do" etc. But you will find LOTS of folks here on the board that has done this, have tools/access to them and probably willing to help you out with an axle swap.
The Ford 8.8 axle from Explorers is the one swapped in the most often, and usually you can get a deal on them, and even find them in the same ratio as what your front axle is. [I see them go for $150ish quite a bit]
The D44 rear end is a bit harder to find, and slightly more desireable than the 8.8, mostly because more stuff is made for it.
If "I" was doing this...and I may at some point in the next year. I would find a 8.8 axle for $150ish in the 4.10 gear range (which is what my front is geared..you would match your front gears) and the disk brakes.
In my case, I would then WELD the rear carrier/spider gears up since I am more of a low budget build.
If you have cash, then go ahead and buy either a selectable locker if that is your fancy, OR, get a Detroit Locker. Have it professionally installed (install is prob in the 150-300 range depending on whom/where/extras)
Final thoughts... there is a 8.8 "kit" that will weld onto the axle and then allow it to be bolted under the Jeep. At the same time as you do that, pay the welder a bit extra to weld the tubes to the diff housing...and possibly go ahead and pay them to "truss" the axle too for more strength.
THEN...buy a teralow for the transfer case...and with the beefed up 8.8 (or d44) you are now ready to go up to 37" tires and rockcrawl pretty seriously, from what I have seen out there in the field.
With the locker in your D35, you can EXPECT to snap axleshafts when rockcrawling, left and right (especially if you TeraLow) starting with 33" tires, maybe even stock since you are using alot more torque with that 4:1 tcase.
I hope this helps bud, we are really trying to help you save some grief in the long run!
Sam Hinton