[fordem]

During that inspection, pay close attention to the front differential and the transfer case.

 

[fordem]

Maybe just loosened the chain in the transfer case? Some info in this thread (and photos) might help.

Transfer case worn

Having to swap out the tcase in the 94 pontiac. I have a spare, I was wondering if there was a way to determine the wear on my spare (chain in particular) or possibly a way to tighten it up. I will probably have to put in a new chain as the demands I put on the little tcase exceed it's design by...

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I doubt it - the transfer cases are not known for giving trouble. I'd say there is a V.E.R.Y high probability the front differential is broken - it's a known weak spot. Applying excessive torque in reverse causes the differential housing to rotate "top-to-front", lifting it away from the cross member, apply enough torque or "shock load" it through spinning tires that suddenly stop when they acquire traction and things break.