Well after dealing with my rotting and wounded 99 1500 Ram I came across a 2001 Ram 1500 5.2 Sport 4x4. It has a few goodies from the PO, full tank of gas ($190 here) along with a crunched transfer case. Bodywise for the year its pretty good.

Once I get it inside out of the rain I will get a better idea of what is wrong. Symptoms so far are while in Park, the truck will still rollback and with the trans in neutral there is a rattle noise in the TFC. A guess that the chain is snapped? Having never rebuilt one, are parts available from a reliable source?

 

As common as they are,your probably better off buying one used.
If the chain were snapped,the rear axle would be unaffected anyway. I've found ones with the shift forks worn down to near nothing,and there was no positive engagement,causing the same issue your finding,although not as far along. They usually start jumping gear under load intermittently.

 

Thanks for the info on the fork wear, I will check that out tonight. The truck did move about 100 feet after it was dropped off.. then popped out again.

 

An update on the transfer case problems, checked out the case and when I pulled the drain plug there wasn't any oil in it and the chain is a nice electric blue colour. No wonder it stopped working.
The next issue that I found was that the mounting flange for the transfer case is broke off the back of the transmission. In the pic the mounting stud is snapped off and the flange is broken on the passenger side.
Good thing the truck was cheap, just going to change the trans and transfer case.

I have a good working transmission/Tcase from a '99 1500 4x4. Any issues that I might have switching it into a '01 1500 4x4? The 99 was a 360 and the 01 is a 318. Was going to re-use the 318 flex plate since the 360 is external balance design.

 

should be fine