Transfer case 2003 H2, repair issues. Help please!

[BeaverBill]

Hello all!

We've been working an issue with our H2 that wouldn't get out of diff lock . We took the cover off the diff after we found that it wasn't engaging and disengaging only to find a dislodged C clip (as explained in another thread of mine, on this site), fixed it, put it together only to find that the problem wasn't solved...then went about troubleshooting the "unsolved problem". Today we extracted the transfer case from the vehicle onto a bench, removed the cover, inspected and our troubles were more than obvious. The transfer case has a half disintegrated selector ring ( # 25, first piece on the left hand side, attached diagram) associated with one of the two selector forks (# 27 : "plastic" or some sort of "ceramic" ...but not metal). the ring was half there, in the sump, but the rest was pulverized in the oil deposit with the ATF. We've taken a good look at the blown diagram of the gears to pinpoint the piece but there are is a component missing on the official diagram, a spring. If anyone with experience could help us with where the SPRING (following post) sits and let us in on the fine details, we would be very appreciative. Please bear with me but I've been ranting on about getting the (bloody!) shop manual for weeks but it seems that the owner is waffling on the issue as we plug away ("cut corners" comes to mind). Could someone help with our doubts so far:

1: the placement of the spring (not included in official blown diagram)

to be continued (can't seem to attach photos).....

 

[BeaverBill]

2: Oil seal and bearing for the transfer case, front. ("transfer case adapter side", Transfer case 1, #21 )


When removing the transfer case from the tranny we made the decision to undo it from the transfer case side of the "adapter sleeve" ( opposed to the tranny side of the "adapter sleeve"...bear with me , we're working blind). The "adapter sleeve", that couples the transfer case to the tranny( coupling the "sleeve/case, # 2 [with studs, not shown]) has a "cardboard" type gasket .. we are wondering why is there a gasket there? The "adapter sleeve" had ATF leaked into it, beyond the transfer case seal (#21), but I have my doubts oil should be there. Is leakage normal?

Question is, is the seal worn and bearing worn, possibly explaining, what we consider, an "excessive" play of the chain. I'm sure the chain should have some play but we're not sure how much?

 

[BeaverBill]

As you can observe the "mysterious" spring on the right hand side of the photo next to the selector fork (#27, on the FIRST blown diagram, FIRST post)

 

[BeaverBill]

 

[BeaverBill]

You can "appreciate" the broken other half of the disintegrated "selector ring" ( # 25, first piece on the left hand side, attached diagram, FIRST POST) on the left hand side of the photo (next to the blue "bit" box and angled torx wrench photo #4 of the FORMER post) Sorry, don't have photo shop installed on this computer to do a better job....Photo #2 and #3, show where the "selector ring" should be , in all due logic (note the spring).