97 ZJ does this sound right
 

While troubleshooting and loud noise, I recorded my transfer case wondering if this sounds normal or is something up. Please check out the vid and let me know what's up

No it does not sound normal but if that was with the suspension hanging you can get all sorts of strange noises out of the whole drivetrain.

Max

Doesn't sound good, but it might be a joint failing, not the t-case.

From the look of it...I was thinking bad front output bearing ?

97 ZJ does this sound right
 

I agree, it sounds like an output bearing, they'll usually sound like a clicking or grinding