Hissen50: Thanks for the message. I wanted to hear from someone who's already done the job just in case there's something I'm not already anticipating, so that helps a lot.
Toyman: I'm referring to the drive gear on the trans output shaft. I'm switching from the 8 to 7 tooth drive gear. I will change the driven gear on the VSS afterward, but that part of the process is much simpler. The 7 tooth drive gear requires a 20 tooth driven gear. I beleive that the 23 tooth gear which a lot of places sell is a hack fix to pair up 3.55's with the stock 8 tooth drive gear. The tooth count/driven gear diameter is not coorect for the 8 tooth drive gear. From what I've read here, some people get away with the 23 tooth driven gear and other have had serious isues (teeth shearing, bad fit,...). That's why I'm going to take off the tailshaft housing and swap drive gears.