Nissan Repair: 2001 Nissan Xterra transmission, nissan xterra, clunk

Question
I have developed an annoyance.  While driving about 40mph (with the car fully warmed up) if I lay off the gas and coast and then depress there is a bit of a clunk.  I had the u-joints and the like checked and they said they were fine.  There is no Engine light which leads me to believe that it's not throwing any codes.  The guy who checked out the driveshaft said that it was stretch in the transfer case which was nothing to worry about and normal for a car with 105,000 miles.  It's annoying though.  It does not seem to do it when the overdrive is off though.  If I coast down from 40 to say under 35 everything seems to be normal.  Seems as though it drops down and then releases at 35.  Any help is appreciated!

Answer
Chris,

Yes, the noise is normal and an annoyance.  You could rebuild the unit to get the slop out of the gears to reduce the noise or you could try new gear grease in both the case and the rear end to dampen the noise.  I would try the latter since that is under $100 bucks and you will be surprised how much it quiets things down.  Go with the thickest gear grease Nissan recommends in your service manual but do not exceed their recommendations.  Otherwise, you are looking at rebuilding parts to get tolerances tighter.