Really I can't get a break with this damn car. haha. So in disassembling the transmission to fix what I thought were the rear bearings - turned out to be the transfer gear bearing on the center diff. So I decided to remove the center diff and do some inspection. I was given a "Free" transmission by one of my friends (Thanks Justin) although - the word "Free" usually comes with disclaimers.
After I popped my transfer case apart and removed the diff, I realized that the bearing (although still intact) was pretty destroyed. So I removed it - Quick bearing separator action in my press and off it came. When I cleaned it up with some brake cleaner and inspected it a bit closer, I found there to be hairline fractures of the center differential casing. This must have been caused by the bearing overheating.
So - That "Free" transmission... I figured, Hey! Maybe the diff is good out of this one! - Well after draining the metallic sludge from the box and fighting with the seized linkages - I pulled the center diff out of that one. Not only was the transfer gear bearing obliterated, but the diff itself was physically busted. You can shake the diff and hear parts floating around. ah man - At least it's not a 6 speed, lol.