Wasn't sure if I should put this here or as its own thread, but I'll keep it here because it was this thread that made my job easier, and hopefully keeping this information together is more helpful than the alternative.
This vehicle has only 36,000 miles on it. I am not trying to rebuild, but just reseal it. Therefore, my goal is to not tear it completely to pieces if I can help it. We’ll see…
1) Taking the unit out: The engine was out when I started… I dropped it with the crossmember on, onto a stump, then rolled it onto the ground. I wish I’d have drained both transmission and transfer case first to save a little bit of a mess.
2) Clean, clean, clean!
Scrape, wire brush, purple power, hose and wire brush, purple power, etc... I put a small screw in the breather hole of the transmission so it wouldn’t leak when I had it upside down.
3) Take apart the three 'main' assemblies – remove the transmission from the adapter (the adapter essentially is part of the transfer case – the input shaft is contained in the adapter).
Note: Not having a manual when I started (thanks to Viperwolf for fixing that), I removed the adapter from the transfer case first. This exposes the needle bearings that support the rear of the transfer case input shaft. There are 13. Be sure to keep track of them! I cleaned the gasket surface on the transfer case and taped a piece of cardboard over the hole to seal the insides from contamination, then finished cleaning the outside of the case that was obstructed by the adapter housing.
Note: If you intend to only remove one of these units from the vehicle and not the whole assembly (or removing them one at a time for weight concerns), remove the transmission from the adapter housing and leave the adapter and transfer case as a unit. This will ensure that you’re not trying to align the transfer case input shaft on needle bearings and cursing while you’re lying under your vehicle.
4) I worked on the transmission next: remove the input bearing retainer, replace the seal, and install with a new gasket, making sure all grit and grease are removed as you work. Check to see that the input shaft spins freely when you install the bearing retainer! Mine didn’t, and it turned out that I had not installed the seal deep enough into its seat. It was binding on the bearing. I coated the dry surfaces (inside the tube of the bearing retainer, and that part of the input shaft covered by the retainer) with assembly lube to prevent rust. I removed the top cover, cleaned the gasket surfaces, made a new gasket and reassembled. I used the aircraft sealer on all gaskets. As noted on other threads, most fasteners are through-holes in these cases, so I coated threads with gasket sealer.
5) Switch to the adapter. The seal is right in the middle of the housing. Set it on its front surface (so the transfer case input shaft is up), and remove the internal snap ring from the shaft, then remove the gear held on by that snap ring (mine slid off with hand pressure). Remove the external snap ring that holds the bearing into the housing. Then remove the shaft and its bearing (they are pressed together). I was again able to remove it with hand pressure after I wiped the casting above the bearing clean of built-up gunk. Turn the housing over and drive out the seal; install the new seal. Note this is the special seal with two springs and wiping surfaces. Make sure you put some assembly lube on the seal. Reinstall the bearing and shaft, then the external snap ring to hold it in the case, then the gear on the shaft and the internal snap ring. Put the assembly in a bag to keep it clean.
6) On to the transfer case. Remove the yoke nuts. Mine were clearly not on to the 125 pounds specified, removing any doubt that this hadn’t been worked on before. The yokes tapped off carefully with a hammer. I removed the rear output shaft housing next. The housing has a flange that inserts in the case. It’s a tight fit, so must come out straight, don’t try to tip it off, slide it out straight. Easier said than done. Clean gasket surfaces, remove and replace the output seal. I set this assembly aside in order to have a lighter case to work on. I sealed the case with more tape and cardboard
7) Shift rail seals were next. I popped the seals out by cutting into them with a cold chisel and carefully prying them out. I removed any burrs on the rail ends with a fine file and then installed the new seals, well-lubricated on the wiping edge and with a fine bead of sealer on the leading edge to prevent any oil from seeping around the seal.
8) Idler shaft ends. I pulled the retainer off and used a brass drift and hammer to move the shaft about ¼ inch towards the retainer side. After a thorough cleaning with brake cleaner, I then put a bead of sealer around both ends where the shaft meets the case and hammered it back to its original position, which should have introduced some sealer into that seam.
9) Lower end of the transfer case.
I did the back end first, the side with the shim pack. Remove, clean, install with aircraft sealer between each shim. Tedious. Put sealer on each cap screw before installing.
The front was easy – remove the yoke (there was an o-ring behind the washer), then the retainer, then the seal from the retainer. I found a gasket between the front of the seal and the retainer – anybody else find this? Install a new seal. I put a thin bead of sealer in the bottom of the retainer to make sure no oil gets around this seal. Replace the gasket and reinstall the retainer. Install the yoke, then add a bead of sealer to the junction between the yoke and the front output shaft. I added enough to fill up to the level of the washer, but not more. I didn’t want a mess in there. Install the nut and torque to specs.
10) Reseal inspection plate. Easy. Note that the four screws on the short ends (2 each end) are through-holes. Seal accordingly.
11) Install rear output shaft assembly to case. Install the yoke, add sealer between the yoke and the output shaft, then washer and nut. Torque to specs. Turn case so the input shaft hole is facing upwards. The transfer case will be on an angle because the rear output yoke holds the top end up. This is convenient for installing the needle bearings. Clean them and the cup in which they ride. Slather the cup liberally with grease. I used white lubriplate. As you clean each needle bearing, put it in the cup. Once 12 of them are in, arrange them properly in the race. The thirteenth one will not fall into place from the center of the cup outwards. You need to drop it into place from above. I used a weakly magnetized screwdriver to do this.
12) Install the adapter gasket, then the adapter, making sure you take care to insert the input shaft tail into the space among the needle bearings. Install the screws with thread sealant.
At this point, I taped over the front of the adapter, took the assembly out in the driveway and scraped and scrubbed one last time, then painted with two coats of black Rust-oleum. No primer. I wasn’t going to paint it at all, but given that it was already 5:00 and there was no way I was getting the drivetrain installed in the vehicle before the end of the day, I indulged. Much happier for it.
I’m going to install the transfer case first, then put in the transmission to save some weight when I lift that thing into place. Even with a jack, it’ll be a lot easier to maneuver.
I accomplished my goal of not tearing the thing entirely apart. Some would argue that after 50 years, I should have to inspect everything and start anew. I wasn’t worried about it; it wasn’t making any noises when I was running it at speed, so I figured I was okay. It was leaking, so I hope this solves my problems there. I used aircraft sealant on each side of each gasket, and ultra black permatex to seal threads and seals to housings.
I hope this account of my experience is a worthwhile addition to this thread and gives others an idea of the procedure. I've been working on old Fords for about 25 years as a hobby. I'm not an expert by any means, but do know my way around the basics of mechanics of this vintage vehicle and am way beyond novice. This is only the second transfer case I've ever worked on, the first being a divorced unit on a 59 Ford pickup. Besides the time, it's not a difficult procedure, just be sure to keep stuff clean on the inside!
If you’re curious as to how long this took me, from dropping the assembly from a vehicle that had no engine to painting it this evening: 20 hours. That’s a lot of scraping grease and scrubbing with Purple Power, plus an hour to paint.