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First, the hydrolics don't seem like a bad Idea, just somewhat a mess but I guess If configured right, It might work without the hassle of more gears and pto enguagement
I have also seen some smaller generators under <_10kw that I could fit on the right side above the fenderwell under the hood and move the battery to another location. I then Would have to figure out how belt it up with the engine. Other than that, it looks fairly easy.. The only other way would be remove the althernator and relocate the fuel filter header and try to fit a gen right in there. Some of the ones I have seen have a 12-14 volt outlet I could use for an alternator.
Now if the 4x4 transfer case has a pto, could always just install the transfer case when I rebuild the e40d for 4x4 and do it that way.Then just cap off the front driveshaft output.
Regarding the transfer can scenario ... I would think that running the pto from a disconnected rear driveline for when it is parked ... Use the 4x option to drive the front wheels ... That would also give you a high and low range in case of bad road conditions ...
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