I had an amazing (better) new thread opened up but the browser's refresh had better plans in mind.
1998 Cherokee, 255,xxx on body, 4.0, auto trans (rebuilt), NP231 T-case, not major mods only cosmetics.
1. T-case grinding when switching to any 4wd. Makes a grinding sound and I get feedback through the handle, feels like something is spinning while i try to move it in. Process I use to switch to 4wd is I stop, trans neutral, select 4wd mode, then I reverse a few feet to make sure everything is aligned I guess. Fresh out of a transmission rebuilt and never did sound/feeling before, 4wd still works and it did before rebuild but now I have issues with this getting it to go in and it sounds terrible. Full and red tranny fluid.

2. Trans used to shift different (was present before rebuild). the "1-2" option used to take me to 4k rpms before shifting into second (I liked this), But now it will shift into 2nd gear early on but stay in 2nd. The problem is if you stay in "1-2" and accelerate to 40-45mph (about 2,500rpm) and let off, it tries to shift back into first and will over-rev. Dumbfounded I don't know what it is.

I will also add this warm starting issue. 2 new fuel pumps in the past year "professionally" installed and problem went away for 7 days before returning. Will start damn near instantly on the second try religiously, but it gets annoying. I also switched from 89 back to 87 octane when the issue returned.
if you need more info LMK, thanks.

 

TPS sensor is the first thing to test for the transmission shifting issue.

 

How's the fluid level in the transfer case?

You're supposed to shift at speed from 2H to 4H.

Here's how the factory suggests you shift the transfer case and I've been doing this since these things were new and I worked at the dealership. Quoted from the owner's manual. The suggestions in CAPS are mine.

"To engage, shift the transfer case lever from 2H to 4H while the vehicle is moving at any legal speed". I LET OFF THE GAS, THROW THE LEVER, TAP THE GAS AND LET OFF.

4L position: " To engage, slow the vehicle to 2-3 MPH , shift the transmission to Neutral, then shift the transfer lever to the right and pull firmly rearward to 4L".

TO SHIFT OUT OF 4L, SHIFT THE TRANSMISSION INTO NEUTRAL WITH THE VEHICLE STOPPED, SHIFT THE TRANSFER CASE LEVER TO 2H, THEN THE TRANS TO D IF YOU HAVE AN AUTOMATIC, OR INTO FIRST GEAR WITH A MANUAL, AND CONTINUE ON.