I would just say drop the transmission and transfer case ...which you will have to disconect all clutch linkage and pull the starter anyway and get you a new one ....I would look at getting a new flywheel ring (the teeth) and having the flywheel resufaced at a auto store...A total new flywheel...
What does the other side look like ??? Are you tourqeing them properly ??? Take a look at the engine when someone else pushes on the gas ...see if it moves towards the passenger side...:)
Are you sure you want to go with a 16" rim ???? Not many jeepers on the trails with 16" rims if you need to get a tire to make it off the trail/.... $.02