Yeah, I would go 3.08, your current series 2 carrier will fit any 3.08 gears, that will give 2250 at 60 mph. Yes, all the factory cam gears had the teeth coated in nylon. All mine were intact, not even cracked except my 450,000 km 307, skipped but never pulled the pan or cover, I had another 307 to swap in. The gears and dual exhaust will wake it up a lot.