Hello RD.
Yes, Inside your transfer case there is a clutch that is made up of several plates that are designed to slip when there is a difference in torque between the front and rear.
If improper type of fluid was put in or if the fluid levels were allowed to get low it may have caused damage.
If indeed that improper fluid was put in, drain and refill with the proper fluid.
NVG 136-NP4 (1-Speed Automatic)
Auto-Trac II Fluid GM P/N 12378508
NVG 233-NP1 (2-Speed Selectable)
Dexron III GM P/N 12346143
NVG 236/246-NP8 (2-Speed Automatic)
Auto-Trac II Fluid GM P/N 12378508
Thank you for using FixYa.
KL
I don't think you have clutches in your t-case unless its all wheel drive if you have push button 4x4 id check vaccum lines on left fender and on transfer case vaccum switch. if you can get all four wheels off ground and get it running,remove batt and tray engage 4x4 and watch diaphram, if pops out ck vaccum and that diaphragm for holes,
There is a shift collar and associated splined flanges inside the
passenger axle tube on the front axle that engage/disengage for 4wd/2wd
respectively. When this does not engage, the noise is typically
described as a grinding or vibration type noise...
Here is a picture of what it looks like inside the passenger side axle tube:
Also, I suggtes review this article to know about diferential slips: 4crawler.com/4x4/TrueTrac.
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