Finally found my problem, jacked up rear end, wheels off the ground, transfer case unlocked, put in drive, found front drive shaft turning and noise coming from front right wheel. It didn't make this noise when locked going the road. Took it apart and found cv joint in pieces. bearings laying in the bottom. I just replaced this last year. I cant believe I changed the transfer case for nothing.

 

Now if I can just find the wire that is shorting out and blowing the fuse when I use the turn signals.

 

wondered if this was the case... glad you found it. Besides its bad to drive with the CDL locked.

common practice every once in a while to jack up every single wheel and rotate to check for noise, drive engagement etc.

 

Yeah, it doesn't make much sense. This same cv joint was broke when I bought it and the rear end worked fine. Here I thought when I locked it up that the front wheels were doing the driving. So I guess the transfer case does act like a differential and applies the torque to the easiest path available when its unlocked.

 

That's exactly what happens, and exactly why the CDL is useful. In cases of wheel slip, an unlocked t-case will send power to the slipping axle (unless traction control does something about it). A locked CDL sends power equally to the front and rear axles at all times. That doesn't mean that a slipping wheel won't continue to slip, but at least all the power won't be going to that wheel.
And contrary to the statement above, driving with the CDL locked isn't bad -- on unstable surfaces. That's what it's FOR. It's also not a problem if one of the driveshafts is removed. It's only a long-term issue when all four wheels have good grip.

 

If you've gone through two CV's on the same side in about a year, you still haven't solved your problem. What's causing those CV's to disintegrate in short order? That's the question you need to answer.