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Pulled the rear diff cover and the ring gear definitely has a good amount of slack in it that needs to be adjusted. That still doesn't explain the noise coming from what seems to be the front. It does explain the hard shifting in low range and maybe the hesitation when trying to move forward. I am going to go ahead and put new bearings on the front output while I have it out. The only other bearing that is left is the front input and after reinstalling the rear output everything feels pretty smooth when you spin it in neutral.
