I don't know about the gauges... . you'll probably need to keep the ECM and/or PCM from the original 6. 5 It gives feedback to the gauge cluster for idiot lights, tach, fuel level, oil pressure, voltage, coolant temp, speedo, etc. All of these parameters are fed from the sensors to the ECM/PCM and then on to the cluster.....
You'll have to fool the ECM into thinking the 12-valve has EGR, no more than 6. 5L boost levels, 8-cylinders, etc.
Since you have a '98 - it's OBDII - which means that its ECM is very sophisticated compared to older ECM's and is a lot harder to deal with... . and especially to fool it into thinking that everything is alright with a 6. 5L V8 diesel under the hood... when in reality it's a kickbutt 5. 9L Cummins I6.
I'm not saying that it can't be done, but it will be a big headache.
On second thought... .
Here's an idea - get brave for this test.
Get your truck rolling down a hill in neutral - kill the engine somehow, but keep the key on - so you can steer and keep the ECM/PCM alive. See if the speedo and so forth still operate. If all the gauges will work "key on engine off"... then you may be a lot closer than we both think to making all this work.
I hope this works out for you - as I have a '96 2-door 4x4 Tahoe in the family that would love a 12-valve 6BT!
Don't worry about the motor mounts... . that's the least of our worries at this point.
Matt