That's WAY too much air for an XJ. Most specify ~32 psi for 225/75R15. Your tire probably says MAX 55 PSI on it... which is the most the manufacturer will warrant the tire if it explodes in your face.

Drop it down to where it should be and give that a go. Too much air will cause poor handling and excessive wear, as well as a pretty bad ride.

 

Ok, I'll give it a shot. But could that really be causing what's going on? I've had it at where it is since I've got the tires (about 5 months) and it drove fine until a few days ago.
And I don't know if it matters, but my tires are 235/75r15 wranglers aired up to about 33-34. The max psi on the sidewall says 35.

 

Might help if you could explain exactly what is wrong with the way it's riding. Stiff? Bouncy? Wandering?

 

Sorry, thought I'd done that already. Haha. It's bouncy, but hard. And jerky sometimes. It all kinda goes in and out though. It's not constant. When it first happened it felt like there was a loose wheel, but I checked and double checked them.

 

Have you tested the shocks by bouncing each corner of the XJ up and down and watching the rebound when you let go? The body should rebound back to the correct position and stop, no additional oscillation.
Then try pushing each corner of the XJ sideways. You should see no movement other than tire sidewall flex. If there's movement anywhere else, something is loose or broken.
You should not see the tire move in and out of the wheel well, for example.

 

Update: Not sure if this is causing everything, but my t-case is going all screwy. It's not wanting to shift back to 2wd whatever I want to do. I'll see about checking the linkage later. But I'm thinking that this is all that really is going on.