4WD and Rear End Experts, Please Sound Off

95 XJ Sport, 4.0, 4WD, 260K (still can't believe it), 1 1/2" lift, 30's, 19lb multi-ports, babied. There are two problems. Ticking noise at rear end, and nashing of gears in 4WD. Any thoughts would be appreciated.

Ticking:
This noise is from the rear end, somewhere. Appears to be driver's side. Seems to disappear after 25 mph. There isn't any play / rocking side to side in the wheels. There's some in and out. Not much tho, not even 1/8", at the most. Isn't that normal? A friend recommended replacing the driveshaft universal joints. Noise is still there. While on blocks I tested it at various speeds. No ticking noise. What the... ???

Does this mean that with the weight of the Jeep on the rear end, the wheel bearings are sounding off? Could this be something else?

Second Problem, 4WD:
Only parking spot left was halfway over a mound of gravel. (I figured, what the heck, I got a 4WD?!?) Couldn't get out of the spot without putting it in 4WD. When I tried to back out, there was a pop and terrible clanging of gears from the front end. The clanging persists in low and high, in drive or neutral, turning or going straight. How screwed am I?

Being stuck with 2WD wouldn't be the worst thing, especially with 260K miles. But, what a travesty!

Just to follow up in case anyone else has a similar problem:

A local mechanic blamed both problems on the transfer (231J) case. His quote was $1350 to put in a remanufactured unit. Even the local boneyards wanted over $400 for a used t-case.

The forum searches turned up a stretched chain as the likely culprit. Got a used one in good shape from ebay for $20. Part, shipping, snap ring pliers, mechanic diagnosis, and scraped knuckles all cost me under $85. Good as new. Well, almost. Thanks previous posters!

FYI... I left the front half of the t-case on the Jeep when I did the repair. It could have been a lot easier if I had pulled the extension housing first, removed the snap ring, let the main shaft remain in place, then pulled the rear half of the case out. I pulled the entire back half out, including the main shaft. Time waster, but it did allow me to offer this next tip...

Grab a couch pillow and stick it in a tied garbage bag for a head rest. This is one of those kinda repairs.