01 Tahoe Noise from transfer case??

My Tahoe has been making this noise that increases with higher rpms and then almost completely goes away when taking the foot of the pedal.

It has become louder and louder over the past few days and sometimes smells like something is burning...

The engine runs perfect at idle, doesn't miss, it's not hot, the ac works fine, everything else seems to be great.

The noise after the truck warms up happens in gear or out of gear, there really is no difference, you just give the truck a little gas and you can hear the winding/grinding noise around the transmission area beneath the truck, that is where it is the loudest.

There are no codes or dash warning lights lit up either...

Any ideas? I am pretty handy when it comes to fixing vehicles, but I am really nervous that this is major.

Should I get the tranny serviced? fluids changes, filter??? The truck has about 110K on it.

Thanks.

I am, currently, having the same problem. I need an answer. It is more annoying than anything. No problems with anything else. I just don't want to get stranded unnecessarily.

Personally, I would have the tranny fluid pan dropped and the fluid drained and the filter/screen cleaned, while the pan is down, inspect the magnets for metal shavings.