94 Grand Cherokee front differential and/or transfer case noise

My buddy's 94 Grand Cherokee with 5.1 L has developed a loud grinding noise. I thought it sounded like a wheel bearing but the shop said, "front differential, transfer case, and possibly drive shaft." Does it sound feasible to remove the drive shafts to and from the transfer case, to see if the noise disappears (indicating transfer case and/or shafts)?
If it is the front differential, how big of a job is it to change the whole unit out? Could it be a bearing in the differential; inner axle bearing, or carrier bearing or something? It is a work vehicle, and he doesn't want to sink big repair dollars into it. He doesn't care if it becomes a 2 wheel drive in the process:tongue:

OK. This is solved for the time being. I removed the front drive shaft. Buddy took us for a road test. "The noise is gone, completely." Whatever the mechanical explanations are, they are beside the point. It is now a 2 wheel drive work wagon. As long as it lasts, he and I are very happy:rofl: