How do I Troubleshoot a Transfer Case That Makes a Clunking Sound When Power is Applied?by Harvey Birdman
The transfer case is a vital part of any four-wheel drive system. It is, for all intents and purposes, a second transmission that allows the vehicle to shift between rear-wheel drive and four-wheel drive, or high and low gearing. The driver then has the luxury of using rear-wheel drive on the road, and four-wheel drive off-road. While a number of problems can occur in the transfer case that would result in a clunking noise, the most likely culprit is a lack of transmission fluid in the transfer case.
Engage the parking brake and turn the vehicle off before inspecting the undercarriage. The transfer case is located directly behind the transmission, connected to a transaxle that transfers force to the front differential. Inspect the transfer case for any deformations in the housing or leaking transmission fluid. If the transfer case is damaged, have the vehicle taken to a mechanic on a flatbed; if it is leaking, it might just need a new gasket.
Inspect the transaxle and the front differential. If the front differential is damaged, the axle might be pushing the transfer gears off kilter, thus causing clunking. If the transaxle has become warped or damaged, it too could be pushing the gears and clutch plate off-center in the transfer case and causing clunks.
Turn the vehicle on and shift into 2H for rear-wheel drive. Drive forward and listen for the clunking noise. If noise still occurs while in 2H, the transfer's clutch plate or the center axle might be warped. Engage 4H, then listen for the clunk again. If the clunk occurs while in 4H, there are damaged gears that are not teething properly and the transfer case must be replaced.