How many miles ago was the tranny rebuilt? The tranny would be my biggest worry with that many miles. If it was rebuilt, say, 10 miles ago (to make a point), I would say it needs more miles on it to make sure it is a good rebuild job. Too many miles on the rebuild (say, more than 50k-75k miles), and I would start to worry again.
Check the fluid - it should look new - red. Make sure the fluid level is good.
The engine should be fine as long as it has not been neglected as far as oil changes. Make sure there is no rocker arm ticking noises. You might want to hear the engine from a cold start.
This is my cheap and quick 4WD test procedure:
Put the truck in a long straightaway (long driveway or side street with no traffic, but it has to be straight - 50-100ft.) Roll all windows down so you can hear.
1 - While standing still (Park or Drive - doesn't matter), push the 4WD button. The first test will be if the indicator light by the button lights up. You might also hear the transfer case motor engage the t-case.
2 - Drive forward STRAIGHT - accelerate slowly to ~40mph (important - do not make turns w/ 4WD engaged on dry pavement). This second test will make sure the autolocking hubs are working. It should not take more than one or two wheel revolutions for the autolocking hubs to lock. You should not hear any loud pops, crunches or grinding from either side front wheels. You should also feel and hear that the front axle and diffy has engaged.
3 - Come to a stop, then put it into reverse and drive in reverse. The autohubs should unlock and relock again in the reverse direction after 2-4 wheel revolutions. Again, no noises from the front wheels. And no turns - keep it straight.
4 - Come to a stop and push the button again to disengage the transfer case. Make sure the indicator light goes out.
My '94 XLT has 189K miles. here's the link to my recent tranny story.
http://www.explorerforum.com/forums/showthread.php?threadid=81107
My rocker arms tap when cold, but I am confident that that will not take a complete engine rebuild to fix.