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Its hard to tell with the main shaft hanging loose, you have to push the main shaft up a little and then look at the chain. Also look at the bottom of the transfer case for ANY kind of scratch damage. I have seen some that were scalloped out, can't see anything like that on yours but the chain is blocking the spot.
Yeah, for $70 and support of one of 's vendors, it made sense just to go with new before I buttoned it all back up. The bottom of the case has no damage, so I don't think the chain is that bad, but $70 is cheap insurance.
Good call to replace since it was open. That being said I hope that's wasn't the sole reason for opening the case unless you had other issues. I replaced mine in the 242 I had because it was skipping teeth in 4lo. Very stretched.
$70 seems steep for a chain, I bought a Morse last year for about $40? But as ehall indicated the mainshaft tends to hang down and to the left when its not supported... I compared the new chain to the one in my 242 and when I realized there was no stretch I sold the new chain to a forum member.