I have a 98 Suburban K1500. It has 250,000 miles on it, but has been working perfectly. It has had a 4 inch suspension lift on it since about 150K.
About a week ago coming home on the interstate it started making a horrible "clackaty-clackaty" noise at 70mph and above. I pulled over and checked everything and it was good. I found out that the noise was coming from the front drive shaft where it goes into the transfer case. I then took it home and noticed that there was very little fluid in the transfer case, so I changed the fluid. The truck is still making the noise, and the speed at which it happens is getting lower and lower. Now if I go over 50 MPH it will make the noise. No engine codes regarding the transfer case or drive line.
Please help as to what the problem is and how do I fix it. I can do most any major repairs-I've rebuilt several engines and transmissions but never a transfer case.

 

My guess is that you are probably going to get a chance to.

Go TIGERS!

 

So is it just rebuild the transfer case, or are there other things I need to check? I have been trying to diagnose it on my own but haven't come up with much. Help is much appreciated.

 

Transfer cases can be FUN. I've seen a couple that have run out of fluid and were damaged pretty good inside. Some aren't really feasible to rebuild. If you're the one replacing it (no labor cost), you can usually find decent used ones from a yard with low mileage. Some are easier\cheaper to find than others. What engine\transmission combo do you have, and is it a floor-shift style or an electronic push-button in-dash selector?