Grinding and clicking in 4 wheel drive

My truck just started doing this recently, in time for our first snow here in Montana.
When put in 4hi or 4low there is a loud clicking/grinding noise coming from perhaps the transfer case or wheel hub areas. The 4x4 will not engage physically though the lights on the floor shifter show that it is engaged. More specifically, it wants to engage but it can't do so fully, all the while making that God awful noise. I shift out of 4 wheel right away and after a couple tries I gave up.
If anyone has had any experience with this, or can steer me in the right direction to look I would be so grateful. We depend on this truck to get around in the harsh winters up here and we don't have much money so I will most likely have to diagnose and complete the repairs myself.