Position transfer case in a shallow drain pan. Remove drain plug and drain any remaining lubricant remaining in case.

Remove transfer case position sensor (1).

Install two bolts (2) partially into the propeller shaft companion flange (3), 180° from each other.Install the rectangular end of the Flange Holder C-3281 (1) over the bolts to hold the companion flange stationary and remove the nut holding the companion flange to the output shaft.

Use Remover C-452 (3) to remove the companion flange (2).

Remove seal washer from front output shaft. Discard washer as it should not be reused.Remove the bolt (2) that attaches the range lever (1) to sector shaft. Then move sector to neutral position and remove range lever from shaft.Be sure to note the orientation of the range lever (lever up or down) so that it may be re-installed in the same direction.

Remove rear extension (1) bolts.

Remove rear extension housing (1). Tap extension once or twice with a plastic mallet to break sealer bead and loosen it.

Remove output bearing (2) retaining ring (3) with heavy duty snap-ring pliers.

Remove rear case(1)-to-front case (2) bolts (3).

Loosen rear case (1) with pry tool to break sealer bead. Insert tool in slot (3) at each end of case.

Unseat rear case (1) from alignment dowels.Remove rear case and oil pump assembly from front case.Do not remove the bolts holding the oil pump cover to the rear case half. The oil pump cover is aligned to the rear output shaft bearing inner race and will become mis-aligned if the bolts are loosened. If the transfer case failure has generated any debris which may have become trapped in the oil pump, the rear case and oil pump assembly MUST be replaced.

Remove shift rail (1) cup (3) and spring (2).

Remove front sprocket (1) retaining ring (2).

Pull mainshaft (3), front sprocket (1) and chain outward about 25.4 mm (1-inch) simultaneously.Remove chain from mainshaft drive sprocket and remove front sprocket and chain as assembly.

Loosen detent plug (2).Remove detent plug (2), spring (3), and plunger (4). Note that the plug has an O-ring seal. Remove and discard this seal.

Remove front output shaft (2) from bearing in the front case (1).

Pull mainshaft assembly (2) out of input gear, mode sleeve, and front case (1).

Remove mode fork (1), mode sleeve (3), and shift rail (2) as assembly. Note which way the sleeve fits in the fork (long side of sleeve goes to front).

Remove range fork retaining ring.Remove range fork (2) and hub (1) as an assembly. Note fork position for installation reference.

Remove the shift sector support (1).

Remove shift sector (1).

Remove the drive sprocket retaining ring (2) from the output shaft (1).

Remove the drive sprocket (3) thrust washer (2) from the output shaft (1).

Remove drive sprocket (2) from the output shaft (1).

Remove the clutch gear (2) from the output shaft (1).

Remove the sprocket hub (2) from the output shaft (1).

Remove the mode hub (3) retaining ring (2) from the output shaft (1).

Remove the mode hub (2) from the output shaft (1).

Remove input gear seal with suitable screw and slide hammer.Remove input gear (1) retaining ring (2) with heavy duty snap-ring pliers.

Place front case in horizontal position. Then remove input gear and low range gear as an assembly (2). Tap gear out of bearing with plastic mallet, if necessary.

Remove snap-ring (1) that retains input gear in low range gear.

Remove retainer (3).

Remove front tabbed thrust washer (1).

Remove input gear (1).

Remove rear tabbed thrust washer (2) from low range gear (1).