When I first started driving my Disco after having the engine swapped, I thought the transfer box linkage to engage the CDL was seized. Well, after working the shift lever back and forth a few times, I finally was able to get the light in the dash to come on, and the CDL to lock.

Well, since this has happened, I have been fooling around in the mud and getting stuck here and there. I have noticed that when I am just sitting there spinning the tires with the CDL locked, every once in a while, I will hear what sounds like gears grinding. It almost sounds like it's popped out of gear, or that the transfer box has popped into neutral. But neither has. Now, I engaged the diff lock while on a gravel road and popped the clutch trying to see if the gears in the transfer box are slipping or what, but no matter how hard I try, I cannot duplicate the noise. It only happens when I am stuck.

Any ideas about what might be going on?

 

I would say bad diff. Drain the front and rear and check for metal.