HERE is that thread... but I don't think that is your issue if you are correct that the truck is partially engaged in 4WD. If those needle bearings were locked up, I'd imagine the t-case would be in Hi/Lo at the same time, not 2WD/4WD. <img src="/forums/images/graemlins/confused.gif" alt="" />

Here's a picture to go along with the rest of this reply:


The bottom-left 'rod' (shift rail) and its attached shift fork go the mainshaft where the needle bearings Steve is referring to are. This engages either high range or low range (the needle bearings are under the low-range gear). This shift fork is 'hard mounted' to the shift rail with a spring pin; so you are physically pulling it into high or low range.

The bottom-right shift rail and its associated shift fork go to the front output shaft and engage 2WD or 4WD. This shift fork is not 'hard mounted' to the shift rail; but instead is able to slide back and forth on it. You are physically putting it into 4WD when you shift the t-case, but when you shift the t-case into 2WD you are just moving the shift rail itself and a 'return spring' is what actually pulls the shift fork back (thus disengaging 4WD).

If your t-case is the same as mine and the problem is the t-case staying in 4WD, my guess is something is preventing that spring from pulling the shift fork fully out of 4WD such as the spring being fatigued or unseated.

My only issue with your diagnosis is that, if the truck was partially engage in 4WD, you should here the grinding all the time and not just above a certain speed or RPM. <img src="/forums/images/graemlins/confused.gif" alt="" />