IMO you'd be better off finding a 4.0 with lower KM sitting in a OBD1 Cherokee that you can hear running. Should be able to dig all that up for $600 or so, snag the whole XJ with the engine, transmission and transfer case.
Buy the gasket set for rebuilding the engine if you have any doubts. Pull the 4.0 apart, have the head checked to see if it needs decking/planing and whatnot. Pull the crank and rods from the 4.2, have them looked at to ensure they aren't crap.
Replace the 4.0 crank and rods with the 4.2L, there's your ghetto stroker. Toss the old 727 and t-case from the Eagle. Slap the newer drivetrain in with OBD1, profit...if you're running that stock trans and t-case with a stroked motor good luck.
That's sort of my plan right now, except the drivetrain is going in and I'm stroking it down the road. I found a XJ that was running for $250 (body rusted to snot), buying the rest of what I need for around $250-300 (engine runs nicely), and all I need to do now is the swap.
For the price of a rebuilt engine, you can have a much beefier and better performing car with a lot of new goodies under the hood. If you have more time than anything, than you know that making a few low cost local purchases is where it's at. Take a look at options you can do locally before blowing a huge wad of cash on a rebuilt motor.
Take the time to do it right and you get exactly what you want...and you can modernize your Eagle for less in the process