Got a used transfer case and put it in. It works great, but the input shaft was a little short. It still fit in the oil seal and caught the splines of the transmission. At least my 4WD works again now. The only problem is now my 4X4 light by the lever doesn't work, could this be from one of those sensors on the T-case, and is it hard to replace?
Oh and last week i filled the old t-case with fresh atf and today when i dropped it the fluid came out all silvery and full of metal flakes.(Looked like liquid anti-seize) I guess that T-case was really chewed up inside...

 

There is a switch above where the transfer case shift linkage goes. That switch is most likely bad.

 

That's the one with 2 wires right? I believe the one with 4 wires is for the speedo.

 

It should only have 2 wires, I believe.
It will be just forward of the split in the case halves, above the shift linkage.

 

Yes correct!

 

OK found it, is there anything special I have to do to replace it or should I just be able to screw the old one out and screw a new one in.

 

Screw the old one out, screw the new one in. Torque: 15-25 ft lbs.