I bought a 1998 Jeep cherokee Classic 4.0 4x4 a couple years ago from some used car lot, sales guy said it had a 4 inch lift one it, but to be honest it looks more like a 3 inch or 2 inch lift. Anyway this problem has persisted with this vehicle ever since I've had it; I can accelerate fine with no clunk or noise and I can coast fine, but when I first let off the gas, there's a clunking/grinding noise that sounds like it's coming from under my drivers seat then goes away (It's louder at higher speeds and only occurs above 30mph) but if I leave the pedal at a certain spot on deceleration, the grinding/ clunking sound will prolong and eventually disappear. Thinking maybe I need a slip yoke eliminator maybe? Also no play in driveshafts

 

You will likely need a Slip Yoke Eliminator (SYE) and new drive shaft. The sound you are describing is likely coming from the u-joints binding since the pinion angle has been changed.

I was not comfortable doing the SYE myself, I paid a mechanic to install it. Cost me about 400 for the install and about 500 for an SYE and a new drive shaft.

 

It could also be the motor or transmission mounts.

 

I've been chasing the exact same issue as well. I have a 2 inch lift in the front and a 3.5 in the rear.

First change was to drop the transfer case. This helped a bunch.

Pinion angle was still off so I put in some shims. This helped a little.


My rear wheel bearings are shot so I am doing that later this week and hope it might help (another forum said this could be linked).

 

Thanks for the suggestions, got an SYE coming in sometime soon and doing front driveshaft u joints.