OK, I think I know what the growling/gritty noise is when i'm in 4X4.
I think its the front bearing in the NP231 that connects to the front drive shaft.

1.) It only makes the sound in 4x4
2.) the bearing/seal area looks wet from possibly leaking fluid
3.) when i turn the drive shaft by hand 1/4 turn i can hear metal on metal sound.

What do you think? Can I replace the front bearing and seal without dropping the xfer case? Idealing I know I should just rebuild the whole thing, just not sure I have the skill. I've replaced engines and clutches alone before but nothing rebuilding.

 

Sounds like you need to take it out and inspect it further and maybe rebuild. It is oneof the easier things to rebuild and if you get into it and can't do it then you can always buy a used one to replace it pretty cheap.

 

Inspect But I'd say the prob is more likely coming from your front axle. Check your front pinion bearing..

 

Would that require pulling the carrier, or can you replace it by just pulling the yoke + nut in the back?

edit: after doing some research it looks like this senario would require redoing the gears and shims, which is out of my comfort zone to do at home =) Lets hope its the transfer case =)

In what scenario could i turn the front drive shaft by hand to test without driving it? could I put the transfer case in neutral + jack up 1 front wheel off the ground? Would that allow me to to turn the drive shaft around and around with Open Diffs?

Thanks!

 

Here is some Cheap parts for you.http://www.jeepforum.com/forum/showthread.php?t=766742