I have a few Marlins in .40-60 Marlin caliber. The cartridge is the same as the Winchester .40-65, and all dies and brass will work. I make mine from .45-70 brass, and it is a one shot through the .40-65 dies to form it.
No reason to rechamber, or rebore your 1881, unless you don't like the .40-60M cartridge. It's a great shooter!