Sounds more like the front differential to me. The way these things work, the hub is always connecting the front wheel to the front CV axles (not like older "manually locking hubs"). There is no locking or unlocking of hubs. The hubs are part of the front wheel bearing assembly.
The wheel bearings, by the way, are notorious for being bad on these trucks. That's a good place to start looking. Driving down the road while swerving the steering wheel back and forth will shift the weight of the vehicle on and off the wheel bearings. When you shift the weight on the bearing, if the bearing gets noisier, then shift the weight off the bearing, and the bearing gets quieter, is an indication of a bad wheel bearing. Also spinning the wheel and wiggling the wheel up and down, in and out to see if there is excess movement. See the wheel bearing threads for more info there.
So the hub connects the wheel to the CV axles, which are directly connected to the front differential. The diff is connected to the transfer case via a driveshaft that has one U-joint and one CV joint. The transfer case directly bolts to the transmission, so its powered all the time.
With this type of torque on demand transfer case, the front axle is engaged in percentages, via a pulse width duty cycle from the 4wd module. The module constantly provides about a 5% duty cycle to partially engage the front axle all the time, and I presume this is to "preload" the front end, taking up the slack. When the vehicle speed sensors determine that the 4 wheel speeds are not even, it adds or subtracts duty cycle to try and maintain 4 even wheel speeds, by locking up the electromagnetic clutch in the transfer case.
So there's plenty of places for failure here, but we can rule out a few quickly. The CV axles will only make noise when you're turning usually, so slow donuts in a parking lot can determine their condition. Chances are, if the boots are not torn, they're good. The wheel bearings are certainly suspect, so check them out. The front driveshaft is likely ok, since it generally is in a pretty straight line so the CV axle doesn't get worked very hard. And the u-joint is likely not the issue, but a quick wiggling of the front driveshaft can determine CV and U joint condition.
The transfer case is a bit tougher to figure out, but they're not so bad. When they do go, they probably make lots of noise. They hold 2 quarts or less of ATF, so my recommendation there is to drain the transfer case, inspect the oil, and refill with 2 quarts of synthetic ATF until fluid is starting to dribble out the top fill hole. VERY EASY JOB, and you should change that once in a while anyway.
If that fluid is good, then you're looking at front diff problems. Pop the cover off, drain and inspect the fluid, and brakleen all the front axle components inside and inspect. In mine, I found that the spider gears have excess play, and that was causing a serious clunk in my drivetrain when the torque converter was locked up (in overdrive cruising speeds), and when I would get on and off the pedal. The slack in the drivetrain drove me nuts. I found a cheap fix in just pulling the brown wire out of the 4wd module temporarily. That kills the entire duty cycle to the transfer case's electromagnetic clutch. It also kills all possibility of the front axle engaging permanently, until you plug that wire back in. Some guys put a switch in line to this brown wire (search "brown wire mod").
In my case, I did it to diagnose what my clunk was. With the front axle not being connected via the transfer case clutch, the clunk went away and that helped me determine it was a problem in the front axle.
By the way, be careful running the vehicle on jack stands. The computer can see the lack of front driveshaft speed as wheel slip, and trigger traction control and advance trac (the transfer case clutch) to try and compensate. You're not supposed to run the vehicle in the air.
I can help you with the brown wire thing if you want to experiment with it. It's easy. Pull the glove box, find the connector on the module, and depin the brown wire with the correct depinning tool. When you're done playing with that, just plug the wire back into the harness.
