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No the transmission doesn't have to be removed to pull the transfer case.
Probably the hardest part of the job is removing the bolts that hold the transfer case to the transmission. They are a bit hard to get at and loctited in.
thats what i figured. tranny shops would probably tell me that they didnt want to screw up my alignment so they charge 150 more than ford of all places to put it in. alignment 45.00.
Getting the bolts out isnt that bad, it is just time consuming. i thing a twelve mm socket. for me it was easier to remove the driveshaft from the front axel than the transfer case. this did lead to a bit of a struggle getting it back in at the correct angle and took two of us to do, but it is doable. You will see what i mean, if the exhaust wasnt there it wouldnt be a problem. i took one out on a saturday and put the other in on that sunday. if i had wanted, i could have done both in one day. just make sure you keep your plugs and wires well out of the way. also when you put it back in make sure you get the fuel line bracket back in with the top two bolts or you will get a really anoying rattle (i know from experiance and have since fixed the problem) OH i almost forgot. the torsion bar cross member MUST COME OUT!!! this means jacking up the front, unloading the tbars (keep track of the number of turns of each side) and then with a BFH just beat the crossmember towards the back of the truck and that will knock out the torsion keys. by the way, where are you located and do you need a transfercase? i have one in good shape if you are interested. you can PM me. it is one that shifts on the dash.
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