The transfer case is grinding in all gears even low. i put it in 1st gear and it just freakin grinds like hell. It is a 4.16:1 gearing.
what could be grinding in all gearing, except low range!!!!     

T-case doesn't have a first, but the trans does.
Grinding trying to put it in gear or after it's in gear it
makes grinding noise?

Not grinding in low range ? T-case in low range or trans in
first gear.

Sorry but your post is a little mixed up, I'm trying to 1st figure
out if you know the difference between the t-case and the transmission
and 2nd if the problem is in the trans or the T-case.

Wild

Ok that did sound pretty bad.
So the problem started when i was driving down an old highway doing about 40 mph in 4th gear and the transfer case was in 2wd. It just started grinding terribly out of nowhere.  and i took it out of gear and put the clutch in and i put it back in 4th gear and i t was fine. it also did it in the rest of the gears. it had just gotten worse to where i could not get going in 1st without it grinding. it also grinds in FOUR HIGH but 4 LOW. so hopefully that is a better understood.

uhhhh.........sure 

OK lets start with the basics, have you checked the oil in both trans and T-case?
you might want to dump the oil in both and see if there are metal chunks in the
oil or on the magnet in the plug

yeah i drained the fluid out of the t-case and there was quite a bit of water in it and also some little metel shavings on the magnetic drain plug. so i will tear into it and check everything out. maybe replace the bearings and clean the case out.

Ya, I bet there are bad bearings in there too and there
might be galling on the gear faces too.

You should drain the trans also, might be water in there too

ok yeah that is a great idea. i should check that. but the vent hole on the t- case didnt have a hose coming off the top of it.
i am going to buy that kit from trail-gear.com to replace all the bearings. and buy new t-case mounts.

Ya, you want the t-case and the trans, as well as
both axles to be fitted with tall breather lines to
keep the water a crud from getting in

i got the transfer case taken all apart and i think the syncros for the input shaft is the part that is grinding. but i didnt get the t-case to grind in 4low so i cant figure which part is grinding. i checked the bearings at they all turn smooth. the only thing i found kind of wrong, was the input shift thing,  shows that it was grinding . what do you think

The T-case does not have syncros, are you talking about the transmission?

There is a engagement dog in the T-case, I had one wear out, and it would
cause the T-case to pop out of low when I was wheeling, it got so bad I
would put a bungee cord on it to hold it in.

Wild

i am talking about the t case, and yes mine is also popping out of 4 low. which shift fork is used to engage 4low, i see the one at the input shat and the one in the main case. the one for the input shaft i cant get to slide up and down, just wondering if that could be the problem, because i did notice that the teeth on both sides of the shift sleeve were worn down. i didnt see anything else wrong with it. seems like it is in pretty good shape still.

The one in the front at the input is the high/low shift fork,
the one in the back is 2-4WD and if the front won't move
that is a problem.

i cant figure out why it wont unless it got jammed in there. there is a small snap ring on the rod of the top shift fork that is not flush with bore, just wondering if it is supposed to shift flush or not.

Did you remove the detent balls under those screw caps, they are located
in the main body of the t-case housing. If they arent removed, the shafts
are hard to move, and if it's not in 4WD the low shaft is locked into high
by the ball between the 2 shafts