Just noticed this, when shifting to park while in 4 lo, bad noises happen. Quite a clunk/grind as the gear selecter passes by R on the way to P. Otherwise, transfer case seems to function fine. Did a search and someone else has had exactly this problem, but the thread never said what was wrong. I would take it to the stealer but its out of warranty and if possible, I'd rather fix it myself. Any ideas?

Thanks to jbplock's link you'll now have the answer;) Look at the bottom of the Allison section. http://service.gm.com/gmtechlink/images/issues/aug04/TLaug04e.html#story1

yeah, mine does the same thing and it scared the hell out of me the first time. now i shift to neutral and wait a few seconds, then park. that cures the problem/