Sounds like the range fork is in need of replacement. Nylon in the pump strainer (near the drain plug) will confirm that.
Is the transfer case shifter rusty/stiff? If so, it preloads the forks, causing accelerated wear on the nylon pads, then the forks fail.
Is the transfer case shifter rusty/stiff? If so, it preloads the forks, causing accelerated wear on the nylon pads, then the forks fail.