you might want to look at changing the gears in the diffs instead of the tcase. it will give better enginer braking/crawl going down hill
Just doing some research on this subject and saw this post.
The 98-02 with a 2.804 first gear has a crawl ratio of 30:1
With 4.88 diff gears instead of stock 4.3 you have a crawl ratio of 34:1
With the 3.116 transfer case gear instead of stock 2.488 (with stock 4.3 diff gears) you have a crawl ratio of 37.5:1
With 4.88s and 3.116 gear you get 42.6:1!
So installing the transfer case gears would give you a better crawl ratio and engine braking over installing diff gears, also far less expensive.
03-07s have 4.1 diff gears but a 3.520 first transmission gear and has a stock crawl ratio of 35.9:1
With 4.88 gears, 42.7:1
With 3.116 transfer case gears, 45:1.
With 3.116 and 4.88s you get 53.6:1!
So in both cases you would achieve a lower crawl ratio with the transfer case gear replacement vs diff gear replacement. The transfer case gears look like they are on sale right now for 800 and they look to be installable by most weekend wrenchers. But even if you had a shop do it the labor looks to be a few hours. If you have diff gears installed, labor alone will run you about 1000-1500. So about 2000-2500 including parts.
However, the diff gears give you a lower gearing all the time, where as the transfer case gears only come into effect when in 4LO.