Updated rear mainshaft support bearing. The output shaft support bearing is a common failure point on the NP246 transfer case. When this bearing fails, it sounds like a growl noise coming out of the transfer case and can allow the mainshaft to move around in the case. When this happens, the chain can jump teeth as well under load. Typically, the rear housing will also be damaged when this happens. Another sign of failure is a leak from the tailshaft seal. You can identify it by grabbing ahold of the driveshaft and moving it up and down, there should be very little movement in a good application.
See the pictures for what a failed output bearing looks like as its was removed from the transfer case. Always be sure to update the bearing
Updated rear mainshaft support bearing