lound noise from 4wd possibly transfer case issue.?

I have a 2003 Chevy Blazer 4.3 Vortec V6. 5 speed auto with low range and 4WD.

Under normal operation, (gearbox set to drive, RWD and not accelerating hard) i hear a noise that sounds like something rubbing up on something else moving at the speed of the wheels. I have already lifted the car and moved each wheel individually to make sure that the brakes feel good and that the disks are flat, everything looks good and I can't manually reproduce the noise even with the rear wheel lifted and placed into drive. The second problem is that whenever i engage 4WD, be it using low range or not, the car no longer makes the periodic rubbing sound but whenever I steer there is a violent jolting and noise. I've never even gotten to steer at more than 5 kph or more than 90 degrees of turning with 4WD because of how violent the clunking is.

if there is a problem with the transfer case, what could it be and around how much am I looking at to fix/replace it?