I think the fact that some of your flange bolts are missing, and others are loose, means that the previous owner was having issues with the T.C. and might have screwed it up trying to fix it. I just finished rebuilding a transfer case for a spare and when they are properly shimmed, with new bearings, there is ZERO laterial movement in the output flanges. I would guess you've got a bad bearing, which in turn has allowed the output shaft to destroy the oil seal.
As for your vibration in only 2nd gear: its got to be tranmission related. If, it were the T.C., or driveline, it would get worse as speed increased. I don't think a Suzuki turns the drivetrain fast enough for your missing bolt to cause a balance problem. The imbalance would be pretty much restrained by the flange being in such close proximity to the trancfer case bearings. a bit different than having a driveline out of balance, where the shaft has a chance to start vibrating in mid span.
By the way, there is a way to shift the T.C. with a screwdriver, in emergencies. You might do a search for the instructions on here. It would be a way of determining if your problem is shifter related, or, some internal problem with the forks, shafts and detents.
Last edited by Azelgin; 05-08-2012 at 10:07 PM.