Yeah, called the junk yard...they got encoder motors for $75 and TCCM's for $50 (have to bring old TCCM to match up numbers from what I understand)..
Well, I'm gonna replace the fluid again seeing how I put about 200 miles on it since change and see if it helps..but yeah, I hope it's not the transfer case but might just let it go seeing how we might just have a mild winter this year. Wish I knew someone with a TechII to read AWD codes..lol...might be best to bust out the $ and have dealer read it.
Thanks for the reply