I had a 3" 66, standard sights, back in the early '90s. It was a short run S&W did to replace the FBI 19's, then they went to the 1006 instead. Wish I had kept it. Not sure I like the look of the Hi-Vis sights on the new ones.
I have two Model 66's with 3" barrels. One is a relatively recent RSR version with a frame-mounted firing pin, and the other is an older gun with a hammer nose firing pin. I obviously like 'em. I find that I can shoot a 3" gun with about the same precision as a 4" (and I still have both a 4" model 66 and a 4" 686), but the 3" is just as concealable as a 2 1/2" piece. I had a 2 1/2 inch model 66 and sold it. I never could shoot it quite as well as the others, but I will say that it was way more than adequate for personal defense.
I use a Desantis pancake that is listed for the Model 13 3". It would likely work fine for 3 1/4 inch barrels. It is an open muzzle design, so a tiny bit of protrusion won't hurt anything. Check this link: http://www.rfholsters.com