This is the chain in the transfer case jumping over the sprockets, needs a rebuild or at least a new chain.

First of all check you have lost both forward and reverse. If this is the case (if not see end of paragraph) it could be that the output shaft or viscous coupling splines have stripped. To check remove front propshaft or lift a front wheel and try rotating the front output flange with your mainbox in "park", if you have an automatic, or 1st gear if you have a manual, and the handbrake applied. If the viscous coupling spline has gone the flange will rotate easily. If the mainshaft spline has failed the effect will be similar but you will hear some sound as the centre differential rotates around the damaged spline. The transfer box will need a full rebuild. If you have an auto and have just lost forward it will be the A clutch in the autobox and the autobox will need a rebuild.

We recommend you use ATF Dextron 2/3 in your Borg Warner transfer box?

If your vehicle is pre 1989 you have the LT230 and I would suggest it is stuck in difflock. If your vehicle is after 1989, Classic or New Shape, then you have the Borg Warner transfer box. When the tyres scrub this indicates the Viscous Coupling unit within the transfer box has seized and needs replacing. We can supply either rebuilt transfer boxes or replacement Viscous Coupling units on their own. Be warned, neglecting this problem causes immense strain on the drive train, which often results in failure of CV joints and/or differentials, as well as rapid tyre wear. For information on fitting a coupling please visit our website and for prices please see below