Transfer Case Clunk during Acceleration and Deceleration

WARNING: This page is about a different car, the 2007 GMC Yukon XL, 2007 GMC Yukon, 2007 Cadillac Escalade EXT, 2007 Cadillac Escalade ESV, and 2007 Cadillac Escalade. However, it is still accessible from the selected car via links, so may be relevant.

Cause	Correction
DEFINITION: During acceleration or deceleration, a clunk is heard or felt in the transfer case. Review the Symptoms - Transfer Case and perform the necessary inspections.
Incorrect fluid level or incorrect fluid	Inspect the transfer case for the correct fluid level. Refer to Transfer Case Fluid Replacement . Inspect the transfer case for the correct type of fluid. Flush the transfer case, and fill with the correct fluid, if required. Refer to Capacities - Approximate Fluid .
Excessive clearance between the slip yoke and the rear output shaft	Inspect for the following conditions: Worn slip yoke splines Worn rear output shaft splines Repair or replace the following components if faulty. Replace the slip yoke, if required. Refer to Rear Propeller Shaft Replacement . Replace the rear output shaft, if required. Refer to Transfer Case Disassemble and Transfer Case Assemble .
Excessive clearance between the slip yoke and the rear bushing	Inspect for the following conditions: Worn rear bushing Worn slip yoke bushing journal Repair or replace the following components if faulty. Replace the slip yoke, if required. Refer to Rear Propeller Shaft Replacement . Replace the rear case half if the rear bushing is worn. Refer to Transfer Case Disassemble and Transfer Case Assemble .
Worn or faulty planetary differential	Inspect the planetary differential for the following conditions: Loose planetary differential splines to the input shaft splines Loose or faulty pinion gears Refer to Cleaning and Inspection . Replace the planetary differential assembly if faulty. Refer to Transfer Case Disassemble and Transfer Case Assemble .
Worn or missing sun gear thrust washer	Inspect to ensure the thrust washer is installed. Inspect the thrust washer and mating surface for excessive wear. Replace the worn or missing thrust washer. Refer to Transfer Case Disassemble and Transfer Case Assemble .
Worn or damaged rear sun gear	Inspect the sun gear external gear teeth for excessive wear. Inspect the sun gear to rear output shaft for excessive looseness. Replace the sun gear or rear output shaft if worn. Refer to Transfer Case Disassemble and Transfer Case Assemble .
Rear output shaft bearing outer retaining ring	Inspect for the following conditions: Proper installation of the rear output shaft bearing retaining ring Excessive wear or damaged retaining ring groove in the rear case half Repair or replace the following components if found faulty: Properly install a new rear output shaft bearing outer retaining ring. Replace the rear case half if the retaining ring groove is excessively worn. Refer to Transfer Case Disassemble and Transfer Case Assemble .