Personally I would'nt worry too much about shortening the LCAs as long as you brace them. Some people have fitted the LCAs with no bracing between the pivot points and that is a concern. I think the car involved in the accident you refer to was such from memory.
The xjs centre will work, but make sure it has the later taper axle bearings. The most difficult part of rebuilding these diffs is the preload, due to the fact this is accomplished with shimming the bearings.
VA Spiteri in melbourne modified mine with the Auburn Gear centre which is working a treat, they tell me it was not straight forward but they now have the knowhow and measurements required to do it. Although not cheap they do good work.
The problem we have is the 19 spline axles which is a little odd.
The complete Auburn LSD centre was cheap, about $500 from memory.
The REAL danger I believe is the driveshafts. All the weight of that corner is pushing towards the diff centre, so the possibility exists that if you break one the wheel can end up in the top of the wheel arch.
Note the adjustable bracing which is on both sides of the LCA.
Hope this helps a little
Kyle..