Has anybody ever heard of bending the rear output shaft of the transfer case???
I'm pretty sure i have managed to do this somehow. I still gotta dig in a little deeper to see the extent of the damage but currently my rear output is wobbling like it's bent.

 

Either bent or bad bearings. Anythings possible and if there was a defect in it it could happen more easily.

I can't recall any specific cases of this happening, but that doesn't mean a whole lot. Used transfer cases aren't such a big hit dollar-wise and they're not that hard to install. Worst case you're looking at less than $400 to do it. Often you can get a JY case for $250 or less.

 

I'm not sure if it's the shaft or the flange yet. I'm gonna take it apart today and see how it looks. a buddy of min is gonna check to see if they got a transfer case at they junkyard he works at.