If you grab hold of the driveshaft and shake it, is it normal if the transfer case moves a little. There held on with rubber mounts right.

The transfer case is bolted onto the transmission, you can't move it by shaking the driveshaft. If the output shaft coming out of the back of the transfer case moves up or down or sideways that would indicate something wrong inside the transfer case. If the output shaft doesn't move but the driveshaft moves then it may be your universal joints. Really need a little more specific information.

mine did the same thing tonight, climbed underneath truck because i had a noise when i got on the highway , sounded like my rear mud flap was getting eaten by my tire. thought maybe was a u-joint, pushed up by u-joint at transfer case and whole thing moved a 1/4 to 3/8" upward, doesnt seem loose though.. also have a little bit of clunking when i pushed up from the output shaft. wondering if i have a bad bearing inside

I found that I could push my transfer case up and down and I found that the bolts from the cross member into the rubber mount were loose. I just tightened them back up and no more movment. I have been meaning to get back under the truck and see if it has come loose again but I haven't done it. You need a long extension because the heads on the bolts are a ways up into the cross member.