Last year, I tried to get an XJ-S prepped for LeMons. By race day(s), the whole enterprise had become a swirling vortex of Fail, but the car itself was mighty fine. XJ-Ss are surprisingly tough cars, except for the Lucas stuff, and a nice one is a treat to drive on the highway. Diffs are available all over the place in wrecked XJ6s (though only the XJ-S has the Powr-Lok limited-slip) and ignition problems can be solved by an XR700 ignition system, available for about $150 at Moss Motors.

The Salisbury diff in the Jag wasn’t exactly a Dana 44, since the ring gear bolts used metric threads instead of the Dana’s imperial threads, but otherwise the internal parts are all supposed ot be interchangable, so if a full internal swap is in order, the Dana guts should work out fine.
I will dispute the seller’s assertion that the engine is worth $1500, since I’ve got one out of an ’83 XJ-S that I paid $1000 for including transmission, as well as a pre-HE out of a ’77 that I picked up for $250 (also with transmission, but the iron BW 3-speed).
I’ve got a really clean open-diff 2.88 rear end out of an ’83 XJ6 for which I spent $200, and a Powr-Lok (I can’t recall the ratio off-hand, but it’s over 3:1)for which I spent $100, but it needs the rotors replaced.
With all that said, even though I spent only $500 on my ’87, and it had none of this one’s axle maladies, I did need to add tires right away, and that got me up neer the $1000 mark, and my car being originally from the northeast has rust issues that don’t appear to be present on this car. If it were closer to me, I’d buy it, if only because I’ve already got all of the bits ot make it work, and even if I had to pilfer parts from my current ride, the solid shell of this one makes the work to fix the mechanicals worthwhile.