I can't really answer the diesel questions, since my truck has a V10 gas engine, but I do have 35" tires with a 4" lift and 4.30 gears. I don't feel like the lift makes my rig unstable, but my camper is probably under 3k pounds fully loaded. I also tow a trailer with it that I would guess is close to 8k pounds. I have plenty of power, even in the mountains. Yes, the transmission shifts out of overdrive on hills. Sometimes it downshifts even more than that. But that's what it's supposed to do. Doesn't bother me a bit.