The transfer case isn’t the issue the transmission won’t engage a gear.
Transfer case may not be the issue, but the fact is, it doesn't matter if you tie a rope around the flywheel and attach it to the transfer case, if the t case is in neutral, and the truck is running, the truck will never move lol
I had to edit this, as I realized with a manual, the case can still be in neutral, but it shouldn't grind I don't believe, unless it's right there at the halfway point of engaged/disengaged
Now an auto will grind like a mf if you try to put it in gear with the case in neutral lol
But that is after all always connected, unlike a clutch
Sounds like the clutch isn't ever fully disengaging