...as for a 360 being able to handle 4-lo...I hope it can!!!
You could probly put a honda civic motor in your truck, and it will still move it in 4-lo!
4-lo is a gear reduction between your transmission and differentials. If 2 or 4-hi is 1:1, then 4-lo will be somewheres around 3:1 or 2:1 depending on the t-case. Some of the more serious wheelers prefer 4:1 or greater...or dual t-cases...
Gear reduction (also called gear ratio) is a formula determining how many revolutions the input will make compared to the output. 1:1 means they both spin the same. 2:1 means the transmission output shaft will spin 2 times to make the transfercase output shaft spin one time. Just like gears on a bicycle. The lower the gear, the slower you go, and the easier it is to climb a hill.
Your transmission has it's own gear ratio for every gear (1, 2, 3, 4, 5, OD, reverse). 1st gear is low, so it will be like 6.5:1 if you have a manual granny gear. 3rd or 4th (depending on what transmission you have) is final gear, 1:1. Overdrive is like an opposite of reduction, they can be around 0.8:1 or so...
Your axles have gear ratios also. These are KEY to a powerful truck. I don't know what your pickup has, probably something like 3.55's (3.55:1). This means that the driveshaft turns 3.55 times before the tires make one full turn.
The higher the number, the "lower" the gearing. Old Jeeps can be found with a 2.79:1 first gear, 2.46:1 4-lo, and optional 6.48:1 axle gears. That's why an old Jeep with a 60 hp 4 cylinder motor can crawl up the side of a mountain.
Hope this clarifies your questions about 4-lo...