There are several issues with running larger tyres. The weight of the tyres & the additional forces due to the increased radius, put more strain on the drivetrain components. It is also common to change the ring & pinion gear ratio, to compensate for the increased tyre size. As you move to a lower ratio (higher numeric), 3.07 -> 4.11 -> 4.56 -> 4.88, etc, the number of teeth on the R&P change, and the strength of the gear is slightly reduced. The number of teeth on the ring gear divided by the number of teeth on the pinion (eg: 41/11 = 3.73) equals the gear ratio.
This is explained at
http://www.ring-pinion.com/tech/techg0100.html
Moving up to Dana 60, helps by increasing the ring size. But the above still holds true, the gear is just bigger and stronger.
I would generally argue not to worry too much about the strength issues, but have a plan (and wallet) to act if you ever break the diff/axles. You may last for many years, and still have your fun (and money).
We have upgraded our rear to a RockCrusher 60 (Dana 60 High Pinion), but we had a major breakage. When I break a part, if possible I upgrade it to a stronger version.
The more carefully you drive, using skill, instead of the right foot, the more likely you are to survive.
35" tyres on stock axles
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