Don, I've tried to adjust the angles with little success. You can't significantly change the pinion or TC angle by raising or lowering the trans mount or the torque arm mount on the front diff (I even have one I modified and you can't change it enough to matter). The TC and the front diff pinion are not parallel and from my measurement, they couldn't have been from the factory either (hence the reason the factory started using CVs). The angles are way, way off of what they "should" be. Look under a new F150 once; they have a CV on both ends of the front drive shaft.
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I've looked at the front angles many times and wondered if the TC output shaft is parallel with the front pinion shaft. The angle of the two shaft is the biggest key for eliminating drive shaft vibrations. I would first try to adjust those to be parallel. The front diff, those all have three bushings in their mounts, and at this age many of them are wearing out. I think my rear one in the bracket is worn on my 98, I ordered four of the front ones, those are identical. The rear only comes with the bracket, which is a too much $190 price.
The trans mount on the cross member is a weak link with the BW4406 installed, that may be a big source of change of the output shaft angle.
The only major difference between the stock 4405 AWD transfer case output shaft and the 4406 output shaft is that on the 4406 the output shaft sits about 1" or so further towards the frame rail which must be just enough to start causing the vibration.
Galvin, you also have a stock CV on the 4404 in your 97 correct? The other angle to consider is the horizontal angle which is magnified by the width of the 4406 like I pointed of above. U-joints don't like to work without vibration in a coumpound angle situation where you have angles on 2 planes.
FYI, I looked up the output shaft specs on the 4406 and the 4405. The 4406 specs are 37 spline, 6 7/16" long. The 4405 specs are 32 spline, 7 7/8" long. I wouldn't be as worried about the length yet, but the spline count would quire it. I called The Drive Shaft Shop and it sounds like they can build anything I want. I need to email them the measurements and pictures of what I have and they will get back to me.