You do need to fix the exhaust brake, but I don't have any specific suggestions.
My Mercedes turbo diesel engine did not have any compatibility issues with the exhaust brake, but maybe you have a different engine...
Hope you find a solution to your issues.
Are you aware of any aftermarket disc conversions that are made specifically to fit the XC chassis, and do they have all the needed ABS interactions/connections/balancing?? I have attached the XC flyer that shows the drum system all around has ABS...just in case you don't have it.
I have seen this about converting/updating other Freightliner trucks but cannot verify the prices or accuracy...
If you have Eaton axles no disc conversion available. If you have Meritor axles you will need backing plates, calipers, discs, hubs, air lines, bearings and possibly axles depending on length required. Just about everything that mounts to the wheel end and out. Also if you have ABS you need to make sure the tone wheel is the same. As for the steer axle you will have to replace the front axle to get the right one for the spindles then backing plates, calipers, discs, air lines, hubs with bearing seals etc. Bad thing about the disc breaks is if you don't know how to adjust them OE have someone that doesn't you will go thru a bunch of shear pins until you learn. Best thing about them is you can change pads in about 2 minutes with the wheels off. Cost for conversion with new parts is ballpark around $8400. Labor is on top. The rear backing plates may require modification where they mount to axle. Depends on what axle you have. Labor is how fast you can spin your wrench or about 17-20 hours at a dealership. You will also need alignment since the front axle is replaced. You can bet 10 grand or so might get you close but no promises.
Chuck