Its because of the engine size, the '99's had the 4.0, the '04's have the 4.6.
While the 4.6 does not have to work as hard you still have to feed the larger cylinders with more fuel.

 

Makes you wonder that whilst owned by Ford they did not put that brilliant 4.6 in that they use in the pickups. Way more power and torque and better mileage.

 

Twas easier to fit new crank and piston rods to same block....

 

I average about 11 mpg. I do mostly highway but my Disco loves the gas station. I also did research on improving mpg. As others have said its a brick on wheels. The weight kills us. I have larger wheels and tires so I know that kills me as does the ARB bumper. Im expecting to get around 10 mpg after I lift it 3". I may spend a lot of time at the gas station but at least I look cool lol. Not a lot of Discos down here.

 

The LR3 V6 is a Ford Explorer engine that has been waterproofed to meet LR standards.
Build here in the US, shipped to the UK, waterproofed, dropped into the LR3, shipped back to the US.
The V8 is a Jaguar engine.
The Puma TD5 is a Ford engine from the Transit van.