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but there is a strange "clunking" noise that seems to be coming from underneath transfer case shifter


the sound can be tricky to track down. I once had a broken rear shock absorber. I was hearing a strange "clunk" under the vehicle. It gone immediately when I replaced the shock.

Oleg
Axiom 4WD 2004: OME shocks, 32" BFG Mudders, RockSliderz, OME929+2" spacers, Stinkyfab bent RE rear links, front ARB locker, rear No-Slip locker, DOR front axle lowering kit, custom middle section skid plate, IronMan torsion bars.
Deceased Rodeo'02 4WD.