It has manual hubs. I'm not positive but I'm thinking it's a U-joint. I'm not positive of t1his but I will be inspecting it further this weekend. Luckily this is a working project truck and not something that I have to have running at all times. It's more of a weekend driver than anything. I did drive it 112 miles round trip this last Monday evening. The same noise came from where the transfer case is. If it's not a U- joint then it is definitely something in the transfer case. I'm pretty sure it's not the transmission itself, it shifts nice and easy and the noise seems to be coming from further back. I did notice that it only makes the noise when I let off the foot feed. So to me it's only when there is what I call back pressure on the transmission when it makes the noise. You know, not when you give it gas but just when you let off completely. As long as the transmission is pulling everything sounds fine but when it's so going down a hill and no pressure on the gas then it makes the noise. Yes I will be inspecting in more detail soon....