That's about what I was expecting too; I am running 31" tires, which are maybe .5" larger than stock, but wider.
(Of course it got ~12mpg with AWD and the 4.0 gasser in it!)

I also suspect I have an air leak into the fuel line, as even when I totally bled the system and prefilter, the prefilter shows 1/2 air after a drive. The fuel system had to be rerouted from an Aux tank (adapted from a 4runner tank).

I just have a tacked in exhaust at the moment, what do you guys suggest for a diameter? By looking over the net a lot of folks seem to have 3"; is this appropriate?