Look at the factory service manual under 89 Montero chassis and body and go to the section titled manual transmission and transfer case. The pic there on page 21-14 of the transfer case is my exact transfer case. You can see where the shifter levers hook up by noting the square holes in the very top front of the transfer case. Those gears in that transfer case are what I am seeing.

On page 21-49 it shows a blow up of the gears. Gear number 16 is the clutch hub gear and that is one of mine that is chewed up. I believe the other one that's chewed up is the sub gear and one other I cannot identify.

EDIT:

Just talked to 4 tranny shops and 3 Mitsubishi dealers.

Here are the results...... 2 tranny shops said that the transfer case on my truck could interfere with it shifting and be the cause of my issues. 1 tranny shop said no way. The last tranny shop said it is possible but unlikely. Go figure right.... 2 say possible 1 says maybe and one says no!

1 Mitsubishi dealer said yes if the bearing is bad and its causing the gears to shift from side to side or up and down. Kind of wobbling I guess or something like that. 1 dealer said no way. The last dealer said unlikely but possible. Again go figure right? 1 says yes one says possible and 1 says no.

Since this thing cost 212 bucks I will just take the chance and replace it and see. If it has any impact on shifting at all I will update and let you folks know. It will be a while because I need decent weather and I need to get the transfer case ordered.

If it has no impact I will probably sell the truck because I cannot afford a transmission for it since they are 3 times the cost of a transfer case even for a used one.

I wish I had never even laid eyes on this truck