Ive just bought a 2nd hand locost as a rolling chassis and its all set up with an escort rear diff, I have a sierra LSD aswell and i intend to use a 2.0 16v vauxhall engine. I assumed the sierra diff would be better but neraly everyone ive spoken to says keep the escort diff (its lighter and easier) and maybe put the sierra rear discs on it. This would save lots of work on making up wishbones, uprights etc, but is it the best way to go? Also will the 3.5:1 ratio be ok or if i changed to a 4:1 would it be too revvy when cruising? Thanks for your opinions.

As the chassis is already set up with the escort axle, that will be the easier route to take, thee are arguments for both the escort (live) axle and the sierra (irs), in your shoes i would go with the escort as its already done for you.
The siera rear brakes might be a bit big for 13" wheels but i have used fiesta discs with sierra calipers with 13" wheels.
As for your diff ratio that will depend on a lot of factors, rolling diam of the wheels, choice of gearbox etc,
you say your sierra diff is a slipper and is a 4.1, what car did this come out of?
whatever you decide, have fun.

No, the lsd is out of an xr4 sorry i think its 3.65:1 but ive seen a few escort 4:1 diffs for sale quite cheaply and wondered about using one of them instead. Ive just bought a set of 15" wheels with 50 profile tyres on and im going to be using a type 9 box

Forget the Sierra diff, it is a lot of work to fit.

How much power will your engine be producing? The standard Escort diff is good for about 150bhp if rebuilt, after that the cross pins can shear. The best solution is to fit a Quaiffe LSD, good for 240bhp at least.

As to ratios, if you fit a 4.1:1 diff with a standard type 9 box then 1st gear will be next to useless (too low). You will get good acceleration through the gears though. Stick with the 3.54:1 for now and if you need more acceleration, you can always change it later. BTW, ratios availabe are 3.54, 3.77, 3.89, 3.9, 4.1, 4.44 + trick 5.1