no easy way to fix the rockers. i suggest amputation and fill the gap with some 4x4x3/16" wall tube welded to the frame with 2x2x3/16" wall tube legs.

as for the popping- did you make absolutely certain your front drive was disconnected in every possible way- t-case not engaged, front hubs not engaged, etc? next thing- are you absolutely certain it's not a blown u-joint? how about a rock or other debris between either the wheel and drum inside the drum? and more- how about the t-case crossmember? is it dinged? is the t-case torquing into it? is the bushing under the passenger side still keeping the t-case from torquing too far? are your other suspension bushings, bolts and nuts still intact? how about shocks? bushings still intact? still functioning properly? lastly- check motor and tranny mounts for wear and tear. maybe also check fan and shroud clearance. if there is nothing wrong with any of this, then it is possible but not very likely, that it could be something wrong with your t-case chain. if you're in 2wd, though, the chain is not even engaged, so, that should rule it out. unless something is worn or broken inside the case allowing the 4wd to almost be engaged when in 2wd and almost not be engaged in 4wd- like a shift fork.