yes, i pulled the caliper and everything out down to the steering knuckle. I found a machine shop here locally that would press in new races for $35 bucks. I just hope the hub is not shot. The guy at the shop said (on the phone) that i should be able to get the nut out with a hammer and screwdriver. I have not separated the half shaft from the transfer case yet because chilton's says I need a special tool. Both outer CV boots are torn and dry. the good news is that the hubs were stuck in "free" so they have not been turning. the former owner said he used the 4 wheel drive in the snow once or twice a year then it quit working. My guess is that the stuck hubs are the issue. whoever put them in (they are aftermarket) did not have any gasket in there and they were bone dry.
One thought... the snap ring on the end of the spline was wallowed out a bit and rusted. do you think that would contribute to popping noises and play? I really thought this was going to be an easy project... you know, just slap on some spring spacers and hit the trail... well, the deeper I go, the worse it gets. the former owner said that it did not leak a drop... well, at least not on the driveway. after removing the skid plate and letting it sit in my garage, it has become apparent that it does leak... from the rear main. the skid plate was catching it all. grrrr.