This page will outline the transfer case rebuild. The synchronizer gears were grinding together, probably because of a broken snap ring on the main shaft. This broken ring let 2 of the synchronizer gears try to force themselves into 4WD while the case was shifted into 2WD. The result was a horrible gear grind when the truck was put under power. These cases are supposed to hold up to 1000ft/lbs+ of torque, but who knows. I have been running synthetic ATF in the case for quite some time, and the fluid looked good whenever i drained it.
I ordered parts from the Dodge house on Friday. "They'll be in on Saturday Mr. Baker" Of course Saturday came and went, and only 3 snap rings came in on Monday. I'm trying to get a snap ring kit and a seal kit from JB Conversions and just get the gears from Dodge. Dodge has to order EVERY peice separately, which is a pain in the ass. Imagine ordering in 15 snap rings, 5 seals, and 2 gears, all of which have a 10 digit part number.
JB got me a bearing and seal kit, synchros, and new gears in about 3 weeks. That's a long time to go without a truck! Here are some pics of the broken internal parts that I took
When putting the case back together, be sure you have EVERY snap ring installed. After tearing mine down 3 times because I had a ring left over, you get pretty good at it.
When you install the case back into the truck, be sure to line it up straight. I had a bent stud and fought with getting it stabbed in for a long time. I finally just replaced it with a bolt instead and it went up fine.