Has anyone out there had a problem with an HD transfer case going bad. I noticed a bad vibration the last few days. When looking around, i noticed the output shaft of the transfer case has some serious vertical slop (1/4"). Any info is appreciated.

 

Sounds like the output shaft bearing has failed. Had that happen to me, although mine's not a HD. When we got the case apart there were several ***** just floating loose from that bearing.

 

yup^^^ output shaft bearing, happened on my old ford, you need to press out the inside of the bearing if its the same on yours