Transfer case slop/leak

Just installed my new trans/transfer case combo. All bolted up and go to feel the driveshaft, and notice it has some movement on coming from the transfer case output shaft. Heres a video of it. http://www.youtube.com/watch?v=zbVr5ZMrSds Watch in HD so you can actually see whats going on.

Also, I need to replace the seal. I looks like pulling the shaft, and pulling out the output shaft, yankin the seal, tapping a new one in, and putting the shaft back in. Does anyone have a torque setting for the nut that goes on the output shaft? or anything else I need to look for?

You need to replace the babbit bearing in the tailcone if it is an early NP231.

Its a 231 from a 96

Bump.