I own a 97 Sport with control trac and I too have had that same problem. It has taken a year, $2,900 and 3 Ford dealerships to find the real problem. It came down to the front and rear speed sensor on the transfer case. They compare the speed of the input shaft of the transfer case to the speed of the front wheels (using the front drive shaft) The system sences if there is a difference in speed and compensates to keep all the wheels at the same speed. If a sensor is bad it will give the GEM computer a false reading and try to send power to the front wheels even on dry pavement. This causes the front end to "bind up" when turning on dry pavement. I recommend you try the two sensors, they are fairly east to reach and they cost about $60 each. There are also two rings inside the t-case that the sensors read, these may be broken or not in allignment. I would at least check this out before anyone talks you into replacing the t-case. By the way, a new t-case from Ford is around $2,200 installed.
