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You could also compensate the transmission mount to accomodate the lowered engine mount to help restore the original pinion angle. Also when you say that most mounts have compressed over the 20yrs you also forget that most the driveshafts have given up by now also. I can't be conclusive that the mounts compressing are what caused this but i can sure bet it helped the u-joints go out.
With lowering the engine you may also want to check the clearence between the steering rack on the front of the oil pan.
Zack.
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