I just got a 1988 XJ 4.0. 5 speed, 126 K.

It was low on power when I got it, but it started everytime. I checked the FI and found that they were very dirty, I had run a couple of can of Seaform through it. with no improvment so I did the following mods.

Installed rebuilt Neon FI's. installed a bored out throttle body from
Leigh Performance Machine- new gaskets. new air filter Etc.

I touched the Pos & Neg bat cables together for about 1 minute after disconnecting them from the battery
It would/does start everytime sitting in the garage when cold. Let it run for a couple of minutes, turn it off, wait a few minutes and it would restart. It would turn over no more then twice before starting.

Drive it 16-20 Miles turn it off it would crank but not start. Pull the coil wire and wasn't getting any spark. Plug the coil wire back in, would get spark but no start. Let it set for a couple of hours until there was no under hood heat then it would start.
I checked the coil module and found Hot spots on the underside. I replaced it still no start. replaced the coil still wouldn't start when hot. I have replaced the spark plugs, plug wires, distributor cap and rotor. checked for shorted out/grounded/loose wires and found nothing.
I have noticed when driving downhill, when engine is warm, on the highway at 60-65 MPH the engine seems to modulate/miss/ hesitate without me moving my foot on the skinny peddle. It doesn't do this on flat ground or uphill.
Power has greatly improved since the mods but it's not starting when hot is driving me balder.
It is not overheating, just normal under hood heat from driving it.
Even when it doesn't start everything electrical works, headlights, horn, dimmer switch, turn signals. radio, cigarette lighter, interior lights gauge lights and gauges. I am not sure if it is supposed to have a neutral switch, it doesn't. It will start without the clutch peddle being depressed.

My last two vehicles were 2.5 1989 YJ and then a 1998 TJ 4.0 no problems with either of them in over 15 years. Sadly both have been sold.

 

ignition module can sometimes cause this issuehttp://208.101.10.250/~naxjaor1/foru...ad.php?t=93913

 

Sounds like the timing is advanced

 

I'd test the camshaft position sensor (in the distributor) when symptomatic. It's a bit unusual, but they can be subject to thermal (heat related) failure. Most of the time, you will still have spark when they fail, but if they fail in a certain way, it can inhibit spark.

And if a cam sensor fails, the engine will continue to run based on the last cam sensor signal. However, the engine will not restart once you turn it off until it cools off.

The #1 cause of spark loss on the 4.0 is the crank sensor, and they commonly fail thermally, but when that happens, it should kill the engine and you shouldn't have spark until it cools down again. That doesn't match your failure mode. But I wouldn't rule this sensor out, as it is the most common sensor failure on the Jeep 4.0