I took my '95 D1to NC last weekto some familyproperty (an entiremountain) and took it up some old walking and climbing trails (havent been used or maintained in years) i took it up steepinclines and back down them. I would say one of the hills was at least 40 degrees for 100 yds, and covered with dried leaves. needless to say; I got to use low gear and the CLD, to keep from slipping backwards. Also took it up red clay banks, and through/over v-shaped terrain.I had to fold my mirrors inat times to blaze new trails and run over small trees/shrubs bc there was no room to turn around. I took it up one real steep washed out trail with ruts from water drainage and got tofamiliarize myself withthe vertical and horizontal levels of the discovery. Overall, it felt too easy when using the right gears. I also drove through small creeks. For being a first time, i learned that 1)I could use a few inches clearance, 2) that I would like to get a steering guard/protector, and 3) that i need to get some metal bumpers (i tore a hole in the front passenger side plastic corner.

 

If it's going to be used regularly for off roading, I'd say go straight for the 3" lift. Most people do the 2" and end up paying double later when they make the move to 3 anyway. Some good All terrain tires and a new bull bar wrap around type with or without winch. Also to consider, sliders if crawling over logs is normal use for it.

I don't know a whole lot about Discos since I've never owned one but I understand that you can buy and install an after factory lever that lets you lock the center diff. That would be a must in my list if I had one. No ideas about the chip, though.

Perhaps Disco Mike can give ya a few pointers. He knows Discos like he designed them!