np208 grinding

i recently converted my 1985 chevy 1/2 truck from an automatic to a standard using a 4 speed with an NP208 transfer case behind it, when i tested the 4 wheel drive i discovered that the transfer case would not go back into 2 wheel drive unless i parked on a steep hill. Recently the weather has been around 20 degrees below zero and no my truck is stuck in 4 low, when i try 4 high or two wheel a grinding noise comes from the transfer case when i let the clutch out. should i just go buy a new one at the yard or is there something i may be able to do. any help is much appreciated. thank you.