Yep, it sounds like the clutch pack is bad or you have a bearing out. Lets remove the transfer case and disassemble it to find out what is wrong it will be fun. Here are all the diagrams showing how to take it apart and instruction and what to look for as well.
You will need to use a press on parts of it this video will show you how to use a press.
Check out the diagrams (below) that show how to rebuilt the transfer case. Please let us know what happens.
Images (Click to enlarge)
Saturday, September 22nd, 2018 AT 11:37 AM