1998 Ex Sport 4X4 clunking in front

[PFA]

I've been trying to figure out what this clunking is that I get in my front end. It doesn't happen all the time. It comes and goes. I leave it in auto (4WD). I thought it may be the wheel bearings/hubs. Changed both sides. Still have the issue. The noise comes and goes, usually under acceleration or steady driving, never under decel. I am thinking the transfer case. Not sure. Looking for some pointers here. Anybody have some ideas?
What does a bad transfer case do when it is going out?

Thanks