96_4 Hi disengages & grinds, 4 Lo is fine

Hi,

Can anyone please diagnose the problem or advise a solution?

I searched the site but only found mention of 1) vaccuum disconnects which I think don't apply to a 96; 2) XC links.

My jeep (96 5spd with command trac) used to occasionally drop out of 4hi and start making gear grinding noises on sandy rutted tracks, now it's happening all the time, even on smooth packed snow powder roads. 4lo works fine. 4hi selects ok and powers the front wheels then it will start grinding, when I re-engage 4hi the same thing happens. Some other points that may be related :
- I replaced the broken rustys rear 3" add a leafs with BDS 3" full spring packs and the back now sits a few inches higher than the front.
- The transfer case seal around the rear driveshaft is leaking a bit of oil.

Does this sound like a major transfer case problem or a minor adjustment issue? What are the XC links?

Thanks.

Id say its an adjustment issue with the linkage.
tcase drop?

Thanks Creeperjeep but I forgot to mention that I've already dropped the TC an inch.

I'll get the TC linkages checked.