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IIRC the ignition amp that bolts to the side of the dizzy is known for problems as it heats up - LR came out with a kit to remote mount it on the wing. The older ignition amp is mounted on the inner wing under the coil. Which type have you got? ETA Read post by 'Bullbar Cowboy'...

Take the heads off & have a look to see what the issue is.

If you haven't already got it get the factory workshop manual. It's a big thick book for these. Includes both 2.4 and 2.5 VM. Not cheap but has saved me a fortune over the years I've had my V8 'Range Rover. All petrol & diesel models from 1986 to 1989'. SRR660ENWM.

What sort of money was he charging for the overhaul?

Standard set of leads (from DLS IIRC when I did the cam & followers etc a few years back). NGK plugs. Rotor arm from simonbbc. The one with the metal strip moulded in NOT the ones that have the strip riveted on. Lucas cap - at least that's what it says on the box! Has the lead pickups well...

If the area the seal runs on is pitted or worn then new seals won't last long. Consider using a speedisleeve to restore the area on the half shaft. Very clever little gizmos & I've used a few. www.skf.com/uk/products/industrial-seals/power-transmission-seals/wear-sleeves/skf-speedi-sleeve

Buy one from a breakers & cannibalise it for what you want?

As norseman says for the model year the engine & both gearboxes are wrong so it sounds like it's had a lot done to it - assuming you've correctly identified the units. The LT230 transfer uses HP oil. The BW box uses ATF. Ashcroft's recommend: "What oil should I use in my Borg Warner transfer...

Easily done when removing/replacing the console & often easy to overlook the obvious.:) ETA kermit said it should show on the dash. I don't know if that's the case as mine's a Classic & doesn't have lights to show what gear you're in in either main or transfer.

Yes. That's fine.

Yes, but you will need to partially strip the dizzy as the springs & weights are in the bowl shaped bottom of the dizzy under the plate. Be an idea to find the relevant section in the manual or online.

Transfer box in 'N'?

Shop around, price seems to vary ridiculously wildly. £25 on ebay: www.ebay.co.uk/itm/255186333669 & the same price from these: www.bearingshopuk.co.uk/skf-cr99125-speedi-sleeve

I've done it on my RRC one. It was quite a while ago & - so far - no leaks. Used them on other things incl the crank pulley. There was a very good 'how to' done by someone which I followed which gave the size of speedisleeve you need but unfortunately it disappeared when the photobucket started...

UCV100660 Few on ebay under 'P38 gear cable' £50ish plus p&p.

It's the 8 bar that you're interested in, you want the maximum reading after a short period of cranking. Test with all plugs out and the throttle wide open so the engine is cranking as fast as possible & there is no restriction on airflow or you won't get an accurate result. How accurate is the...

I've heard of something called a 'ballast resistor'. This might (or might not!) help to make a bit more sense of it but it sounds like the electronic distributors don't use it anyway. www.landyzone.co.uk/land-rover/ballast-resistor-required.176329/

It's got the 'flapper' type airflow meter which uses a flap to measure airflow as opposed to the later 'hotwire' airflow meter which uses a heated wire. I have no idea about the resistor.

If you haven't already done so fully charge the battery with a battery charger or fit a known good fully charged battery being sure to check the terminals are clean & tight. See what happens.

Did the new pulley eventually arrive or did you manage to find the problem & cancel it?