Does anyone know of a good close ratio tranny to replace the R154? Or would a higher ratio rear work just as well?

A different rear is probably what you are looking for. Changing it wont change the ratio or distance between the sets, because they are all being changed.

The expensive route is going to Toyota and picking up a 4.30 LSD from a non turbo car.

Used is cheaper, but you need to check backlash.

That sounds like the easiest, cheapest, and most rewarding route to take. According to some calculations I did that would lower the theoretical top speed from 170mph to 150mph. no biggy cause I never drive that fast anywhere. but would I have a problem with the speedometer reading?

Also, what's backlash?

Yes you would have a speedo that reads faster than you are actually going. You can count the teeth on the speedo gear. If they are different, try swapping them.

The car is limited to 156 mph.

Backlash is the distance from the ring gear to the pinion gear. Measured in thousandths.