You'll smell a little brake for a couple of miles after you adjust them, but then it goes away as the pads wear down a bit. I would say that the rear pads drag for the same amount of time that you'll smell the brakes, but what you are left with is rear pads that are adjusted within a thousanth's of an inch away from the drums. In all honesty I've never had to replace my rear shoes prematurely due to excessive wear, and I've been doing this for years.

I'm sure you could adjust the rear brake's using Bamachem's method, but you'ld just have to adjust them a little tighter. Like I said, when I adjust my rear brakes, I can only get 3 maybe four clicks on my e-brake afterwards with a moderate pull.

 

The 3rd gen rear axle is nearly identical to all the other Toy truck/4runner rear axles ('79-02+ ?). Any rear disk kit made for just about any Toy truck/4runner should fit. Allpro, Sky Manufacturing, Front Range Offroad, and others make rear disk kits.

As others have already mentioned, swapping rear disks from a 4th gen or Sequoia is not really an option. The axle housing ends are completely different.