Transmission noise

At first I thought the noise was just my tires humming, but realized it was too loud to be my tires. While driving when I put the transmission in neutral the noise completely goes away. The jeep is running fine, not hesitating or shifting funny.
Any suggestions on what this could be? I have very little knowledge when it comes to working on transmissions. I took the Jeep to a shop and they drove it around and said it needed to be completely rebuilt and wanted 2500-2800 dollars to rebuild the transmission. I might not be the smartest when it come to transmissions but I don't think I need a complete overhaul. Any help would be greatly appreciated.

Always include the year and engine and in this case the tranny model when you post. Lots of differences through the years.

It's hard for us to help you with noises. What did they base their opinion of the need for a rebuild on? Just the test ride? Did they say what they thought was wrong? Any actual testing done on your transmission? The devil is in the details as they say...

You may want to get another technician from a different shop take a test ride with you and give you their opinion. Pick a smaller independent shop if there is one in your area.

For tranny issues, basics should be reviewed.

1. How many miles on this transmission?
2. What is the history of routine service (filter/fluid) changes?
3. Assume that the fluid level is correct on the dipstick and fluid is not contaminated/burned?

In the event that you do need one, forking out $2800 is pretty steep compared to the actual value of many XJs. Consider swapping in one from a salvage yard, Craigslist and the like, or see what a remanufactured one costs shipped to you.

Could also be an unbalanced driveshaft, a bad U-joint (long shot), not enough slip yoke engagement (so under torque load the yoke is pushing slightly sideways and resulting in the vibration), or differential issues. All of these can appear under load and disappear when not loaded. I'd check them first as they are a heck of a lot cheaper to fix, especially as you can deal with most of them yourself.

Also, if it does end up being your transmission, definitely swap one in from a salvage yard or someone on here. If you get it from someone you don't know or someone who isn't on here, I strongly suggest checking the fluid color (you want it to be a little dirty, not perfect, or they could have just done a drain+fill after removing it.)

Think about it this way, if you have the time and have/want the experience, you can swap in something like ten transmissions from the junkyard (at the very least) before you start losing money vs having them rebuild it.

I have a 99 xj with about 110,000 miles on it. It's an aw4 tranny. The shop just drove the jeep around and came to the conclusion that it needed to be rebuilt. I recently had the fluid and filter in the tranny changed. Also this weekend I changed the diff fluids and did not noticeanything out of the ordinary.
How would I go about checking to see if the driveshaft is out of balance?

You can remove the rear driveshaft and put it in 4wd - put your parking brake on while doing this unless you want to be run over by your own XJ though. If the vibration changes or goes away, it's the rear driveshaft or differential. While you're at it, you can check the U-joints, look for abnormal wear on the slip yoke splines, and bring it to a driveshaft shop to have them check the balancing on it.

EDIT: are you lifted at all? Does it only show up when you're accelerating/decelerating with it in drive?

I have a 6 inch lift with the RE hack and tap SYE kit. It only makes the noise in drive and going over 25 mph. If I let off the acclerator or shift into neutral to noise stops until I get back on the acclerator. It does not make the noise downshifting.

I doubt its the transmission.

I've recently blown two AW4s and neither of them did what you are describing. The noise they make when they go bad sounds more like a metal heat shield vibrating than a tire hum.

Could your exhaust be making the noise .... sometimes when they get clogged they will make noises while under load.

What DS are you using? A stock XJ 30.66" front in the rear? Mine was completely maxed out at 7" of lift. I now run a front DS out of a V8 ZJ with a length of 32.87". Issue gone. Another thing to check is the trans mount.

The DS is custom built by a local shop. I called them up today and described the situation to them. They seem to think that the DS might be out of balance so I'm going to pull it tonight and have them check it tomorrow.

I'm now pretty sure that it is not the tranny at all. I had a smaller local shop inspect/test drive and they did not seem to think anything was wrong with the tranny. Shifting and downshifting properly not hesitating or sputtering. Just really annoying and noisy. They seemed to think it could be the rearend. I recently changed the diff fluids and the teeth on the ring and pinion looked fine. No noticeable amout of metal shavings, what else should I look for with the ring and pinion?

U could try running the front DS in place of the rear and see what happens.

I think tonight I'm going to try what Kastein mentioned above. Pulling the rear driveshaft out and driving in 4wd to see if the problem goes away that way I will know that it is either the driveshaft or the rearend.

If it ends up being the rearend, try prying on the carrier (not the ring gear!) with a prybar, see if you can move it in the bearing races. Also check if the pinion is flopping around in its bearing races, I usually just grab the yoke and yank back and forth, if you can move it you have a problem. If it passes both of those, spray the sucker out with brake cleaner and run patterns on it, see if something has worn out resulting in bad setup maybe?

EDIT: and... this is why you don't go to large chain transmission rebuild shops! I really hate to think about how much my parents must have spent on rebuilds they didn't need, I know we had the minivans and dodge ram van in for at least five or six rebuilds over their combined lifespans. Some of them were probably TCU/ECU/TPS issues or TVC/equivalent issues...

I knew something was up at the transmission store when they drove it around for maybe 5 minutes, came back and told me it needed to be completely overhauled. They didn't look at anything and came to that conclusion.

when pulling the driveshaft, I noticed there was a little play up around the SYE. I went for a dirve and the noise is completely gone. I'm hoping that the DS just needs to be rebalanced and have some new u-joints put in. I'm going to hold off checking the rearend unitl tomorrow after I take the DS to the local shop.

One thing to keep in mind...On the later AW4, I've seen a bunch of planatary failures that sound just like (or almost just like ) a rear diff noise. I usually see them after someone has gone through the diff and found nothing. But yours does sound like a diff to me.