UPDATE:
Talked to a few local 4-wd shops, got passed from this guy to that guy, round' and round'. Finally ended up calling a place about 100 miles away.
Talked to a very nice guy who has been building Dana's since he was 20 yrs old,(he's 52 now).
Long story short.
Dana power-lock center sections have the same outside dia. and run surface for the axle gears. Which answers my question....
Can you put 23 spline side gears in place of 35's?.... Yes
They must be Power-lock side gears, the side gears from your "open" diff. will not work. No drive teeth for the clutches.
He told me that he keeps about 1/2 doz Dana Power-lock cases in storage just for these conversions. He has built them for 23, 30,32,35 and other spline counts. He does recommend that since you are that far into it, put in new clutches.
He also reminded me to be careful about the carrier itself.
4:10 and up ie: 4:56, 4:88, and up have one bolt pattern for the ring gear.
3:73 and down ie: 3:?? and down have another bolt pattern for the ring gear.
SO...... I am off to find a Power-lock center, 4:10 and up, to rebuild for truck.
I will keep everyone posted as to how this goes as i'm working on it. Oh yeah, i will take pics to.
"Never fear...Power-lock is here!!!!"
Two-bit