Depending on how much money you want to spend on it, I'd go with either an aftermarket linkage upgrade (if you want to spend money) or use a locking ring.
I'm not sure what they're called officially, but I had soft door on my old wrangler and the top half had these rings to set the height of the upper half. Just a circular ring that tightened down with a hex key - probably stocked at a good hardware store.
Another thought is to see if you can replace the rubber bushing - I know the arm bushings are sold on quadratec, so maybe the main bar bushing is as well.

 

The TC linkage on our XJs is far more complicated than it needs to be. The Boostwerks conversion kit is well under $100, and worth every penny.

I was having problems with my 95's and after ****ing with it for the better part of a day i ordered up the kit. This is something ill be doing to any future XJs from now on. Better than new.

Not only is it working properly now, its easier to use. No effort, just smooth solid clicks.

 

Do you have a transfer case drop installed and how is your transmission mount? If you can pry it over to put it back in, it sounds kind of sloppy

 

Is your 95 at stock height?

 

I had to pop that same bar out on my 95 to put a new clutch in - it's on a bracket and there's enough play to slide it a bit even with a brand new Mopar transmission mount. If the bushing on the body side is worn out or gone it can do what the O.P. describes.

The shifter would definitely feel pretty sloppy however.

 

Nope, 3" lift. The kit not only operates much smoother the OE and eliminates unnecessary moving parts, its fully adjustable on both ends. It'll easily compensate for different lift heights.

If i remember to, ill crawl under there and get a pic of it in the morning.

 

Nice! I'm keeping my 95 at stock height, but that transfer case linkage is always something I've hated on both the XJ and my old TJ. That kit looks like a nice solution and the price is definitely better than most aftermarket linkages that I've seen. My XJ's linkage is OK at the moment, but at the first sign of trouble with the thing I'll be upgrading it.

 

Ok heres the Boostwerks kit on my 95.

Nice n simple, straight shot from the bottom of the TC shifter to the TC arm. Lol, the gold nuts are my creative spacers as i was too lazy to remove the OE bracket on the transfer case. Works perfect either way.

This is the key to eliminating all the pivot points of the factory linkage. The kit includes a new TC arm the faces up instead of down. The arm and the bottom of the shift lever are now moving in the same direction.


Why the HELL Jeep didnt just do it this way in the first place ill never understand.

Pretty easy install, hardest part of the whole job is pulling and reinstalling the console, lol. This is to pull the shift lever to drill the extra hole. You're NOT going to drill it in-car. I tried.


And thats not rust on it, just good ol Texas mud.
Because Jeep.

 

Nice!! I'm adding this to my "future enhancements" list.