My F-350 has had a problem since I bought it where either the transfer case or the auto hubs grind badly for about 1/4 second and then engage with a loud clunk when the truck is moving at anything faster than a walking pace. It doesn't matter if I roll off the throttle, push the clutch in, or put the transmission in neutral.

I serviced the hubs using Guzzle's writeup but the 4WD system still has the same problem.

Should the 4WD setup be pretty much silent when it engages? I can't imagine the gear grinding is normal. What should I check next?