Hold up. I bought an 04 that had the same thing happen. It was the flange that came out the front of the transfer case was bent. Need to check run out on the flange face with a dial indicator. Mine was like .012 out. Shook like crazy. I put a 300.00 junk yard tranny and new flange on the case. Works great. These transfer cases are tough.

 

My mechanic, The British Four Wheel Drive Company- South Florida Pompano Beach found me a good used transmission and they're rebuilding it. Will come with 12 month / 12k mile warranty. Can't wait to have it back.

 

OK thats sound good but at what cost!!

 

Follow up since I first posted. D2 runs great now. Rebuilt transmission, rebuilt front diff, new Tom Woods front drive shaft and new Terra Firma steering damper. Still only has 49k miles. Considering selling now. Looking at 2010 - 2012 L322.