When ever in 4wd I get a loud knock where my front drive shaft meets the transfer case. Is that a bad cv joint or is it in the tcase

 

Likely the U joints. You need a press/big vice and some sockets to get them out. A BFH will also work. Front driveshaft can be tackled at home by a learner. If you haven't done them before, good news is they need replacing anyway. If that doesn't fly you can look at something else.

BTW there are no CV-joints in XJs (except maybe the eaarly Jeeps with the stick-in-a-can front DS). The transfer case-end is a double-cardan joint with two U-joints and a centering ball in the middle, a slip yoke in the drive shaft, and a single-cardan joint with one U-joint at the axle pinion end.