Hi Jim,
Thanks....Ya, I have pulled all that linkage apart and scraped it/sanded it/lubed it and put it back together. That includes the steel shift rod assembly. After my working on it, it moved well, a little less so once I put the steel ball bearing and spring back in and tightened up the bolt. Well, now all is back in place and the linkage is real smooth except I can see that steel shift rod won't go into the second position (the seat for the ball bearing). I think at this point the problem is in the transfer case which hasn't spun for a long time, does that make sense? Or else I just need to turn the engine on so I can put it in gear a bit and see if the shifter will slide. Gotcha on the plug on the back of the t-case. I'll be filling it first thing tomorrow and see what happens. Yup, my boot was totally rotten. Gonna have to buy one of them, I suppose. What are your thoughts on the internal rubber ring where the steel shift rod goes in? I didn't change it, nor the fibrous cork colored ring gasket that sits right above it. I noticed they were both a little damaged but....I crossed my fingers and used 'em anyways. I suppose it's easy enough to take out that part and change it if it really becomes a problem.
I'm thinking of just cutting a piece of metal or rubber myself for the bell housing. What do you think? Seems easy enough and no one can see it anyway!