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The transmission doesn't have to be dropped down, you can use a jack to support the front of it when you remove the engine.
Installing the engine with the transmission in the truck is a little more difficult though. Pay attention to the angle of the engine and transmission and be sure they are at the same angle when trying to get the input shaft through the clutch. Its also very important to not the the weight of the transmission or the weight of the engine put a load in the input shaft of the transmission. Its a very do-able way to do it though, just might take a few times to get it stabbed.
If it were me I would probably drop the transmission since it makes the instalation so much easier, and dropping the 5 speed is a piece of cake.
Might only be 1 hour worth of extra work to get the transfer case down and the transmission out when your already pulling the engine. Reinstalling the transmission is also easy once the engine is in the truck
Another crazy thing that makes engine removal/installation easier is to remove the entire front clip and front bumper. You can remove the fenders, wheelwells, radiator core support/headlights/grille as one unit. This will give a really unobstructed view of the engine, and makes the height needed to get the engine out of the truck much lower.