Most likely cause is the shift forks. We sell hundreds of forks for transfer cases, and they are the most common problem of all. There is a range fork(hi-low range) and a mode fork (2wd & 4wd). Most likely cause is the range fork and the slider it goes in, although the mode fork could be bad,too. Since you have to split the case to change them, a bearing & seal kit is not a bad idea, especially if it has ,lots of miles on it.
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