i have a 84 chevy 3/4 ton with a sm465 tranny and a 208 case. the problem i'm having is it pops out of 4-high as soon as i get on the gas hard. also the 4wd doesn't engage until the lever is completely back. does this sound like just and adjustment problem or does the transfer case possibly need rebuilt?
i dont know if you have a body lift or not, but i had some issues with my 208, that were very simular to what your talking about. my issue was linkage, the problem was when the guy that had it before me put on a bodylift, he never fixed the tcase linkage, so i took it off, cleaned it all up and reinstalled it, took a bit of playing with to get it right, but she works great now. the other issue might be the plastic sliders inside, if there worn then the gears and come out of mesh, but usually from what ive read this is more common that jsut when u give it gas.
hope this helps