Gutless 4 cyl?

so i took my truck out wheelin for the first time the other day, noticed a few things that need to be done
my main concern is it seems to have no torque.
it will not go up a rough steep grade in 4 high, has no pull in 2nd gear below 2000rpm, and not much better till over 3000
that being said, it'll crawl anywhere in 4 low
its got a minor exhaust leak right before the cat, witch leads me to believe the cat's plugged up maybe.. i hear they are quite expensive, i have no need to pass aircare would getting rid of it altogether be a good idea?

the truck is a 98 2.7L 4x4, on 31's with quite a heavy bush bumper on it
is that enough for it to need to be regeared?

on a different note how common are lsd's on these trucks?
sometimes it seems as though i have an open diff - others its locked... i did a burnout to test this and it laid two patches.. a friends of mine thought maybe an old lsd thats doesn't engage every time.. i dont know much about them

any help is appreciated
thanks