I looked into this last summer for my early '98 12-valve. Found a D80 LS from an 02 at a wrecking yard. As near as I could tell, it would bolt right up since I have a D80 already, just the brakes are different. From measurements, it appears the disc version would cause the rear wheels to stick out about 1/2 inch more on each side - pretty minimal. I think the parking brake cables will even work without modification, but I'm not sure since I never did the project.
Yeah, as surfbeetle said, you'd probably need to get a proportioning valve and may have to work over some of your brake lines to the rear. But I think the master cylinder is OK.
The reason I never did the project was the cost. The yard wanted $1800 for the axle with brake discs and calipers, which I thought was too much.
I also considered just a disc brake kit, but by the time I'd figured in the costs and the reports from those that had done it seem to be mixed (some said it was great, some said it was lousy) I decided it was better to stay with OEM parts.
Wonder if the yard still has that axle...
-Jay