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transfer case
Could be transfer case. I have a '97 4x4, 4.0 liter (113,000 mi) that blew up on the freeway yesterday, couldn't drive it. Had it towed to dealership that discovered its the transfer case that needs replacement.
We had previous problems with clunking noises when shifting to 4x4 low to 4x4 high or into reverse while in 4x4. Worked fine otherwise so we ignored the clunks. Then we got the high pitch grinding/ whirring sound when it shifted from overdrive to 4th gear. Shifting to OD helped but when the a/c came on the sound returned. When going 70 on the freeway its a scary sound. We pulled over and when it shifted to lower gears we heard even scarier clunks and grinding. We thought the tranny broke. Couldn't get it back in gear so we had to get it towed.
Quotes for new transfer case range from $2800 at the dealer to $1900 at independent shop (California) includes parts, labor, tax. Local Aamco sop said they had a source in NY that sold rebuilt units that eliminated Ford's problem, cost: $2100. All with 12 mos/12,000 mi warranty. Sources said transfer cases for 1995-1998 were bad news, Ford never did fix so a replacement could repeat the problem.
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