18' Tacoma with Popping/Grinding noise from front end in 4wd

I have an 18' Tacoma with 65k miles on it, when I shift into 4wd the shift takes quite a while, like 2 or 3 minutes of blinking light then anything above a say 3 or 4mph I get a popping/grinding noise from the front end and you can physically feel the drive train popping, almost seems like the 4wd isn't engaging all the way. When shift out of 4wd the shift takes a couple minutes and no issues in 2wd. I have tried making the shift in both P, D, N, & R, as well as both allowing the truck to roll forward and backwards in neutral and under power, none of these have made a difference. Any thoughts on what the issue is?

I am aware of the needle bearing issues and dont think this to be the case as I have no problems in 2wd

 

Update: Had it into the dealer last week, they advised that the front differential would need to be replaced, fast forward a week waiting on parts and a loaner they changed the differential yesterday and no change, per them the transfer case is bad, the chain is slipping. Again waiting on parts and hopefully it will be completed today.

Anyone had a transfer case go bad at 65k miles? Is this something should I be concerned about excessive wear on other parts in the future?

 

Sounds like they are just throwing parts at it, expensive parts at that, and have done no real diagnosing for the real problem.

This is being done under powertrain warranty?

 

I am out of warranty, ~65k miles. They are honoring the quoted price for the differential in replacing the transfer case and Toyota is covering the labor. Yes it does sound like they have done no diagnosing, the differential replacement was done referencing the service bulletin about a noise in 2wd that goes away in 4wd even though that is not at all what my problem is.

 

Is the truck lifted and are the tires stock? Did it come on suddenly? Do you off-road much and how rough?

 

Seems like a cv joint is bad.

 

No lift, tires arent stock, Falken Wildpeak AT3 larger than stock but not clearance issues. It came on suddenly in that when I needed 4WD it didn't work but in the 9 months I have owned the truck 4WD has been engage maybe 3 times, usually at crappy boat launches to get me boat out of the water. Usage was not rough, engage 4 return to drive, apply minimum required throttle to achieve forward movement, disengage once on level ground.