It looks as though the Dana 44 is still under there. I'm guessing he replaced the t-case with a tail shaft housing and got a new driveshaft. I almost bought a Bronco in Auston that had this done to it. It also had a 500hp 460 though. He was converting it into a pure drag truck.
Why? Well, Bill Stroppe built and raced a 2wd Bronco in 1970. Less "un-sprung" weight means your tires follow the ground closer. Great for high speed control. Check it out on page 57 of the first edition of "Bronco Driver Magazine"
Not sure that is quite what this guy had in mind, though.
I read in a truck magazine about 3 yrs ago that ford made a limited number of 2wd bronco's specifically for the military(i think). Anyway, the mag said that the bronc's could bring alot of money. Somewhere in the neighborhood of $100 thousand plus. It was just a truck magazine, however, and we all know how totally off-based some of the things are that we read in print.