97 Ram transfer case help

Could be the rear end. The pinion bearings are quite common to go out on those trucks. You could jack up the back end, put it on some jacks stands and run it with the tires off the ground. Then see where the noise comes from. The pinion bearings will echo up the drive shaft and seem to come from the T case. The t cases are usually pretty reliable as long as they are kept full of fluid. If it leaks and has been run low the chain stretches out and can rub inside the case.