What transfer case do you have? I'm assuming the 242. Sounds like maybe the double cardan joint in the front driveshaft might be getting worn. (From what I was told by Tom Woods Custom Driveshafts) If you take the driveshaft off, the double cardan should stay up, not just flop down.
Try changing the fluid in your t-case. Two quarts of Mopar 7176 +4 (ATF +4... DON'T USE DEXRON/MERCON or GEAR OIL!) will do it.
Your u-joints might need lubrication. If you have grease fittings, give them a shot of grease. If not, you might need to pull the shaft and check the caps to see how they rotate.
Mid-Florida Jeep Club - Member
1996 Jeep Grand Cherokee, 4.0L/42RE/242 - Rebuilt motor w/ Comp cam (4/12), 3.5" Junkyard F>R lift, 31x10.5.x15 M/T's, Spartan Locked D44a, TC & tank skids, F&R adj trackbars, V8 steering arms
Galaxy DX99V CB, 102" SS Whip, Yaesu FT-2900R 2m, Larsen 1/4w mag mount, Sony HU, Massive 3way - F Door, Pioneer 3way - R Doors, MB Quart ONX304 Subs (x2), Lanzar 1600w amp.
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