Suzuki: 86 Samurai Popping out of 4WD, output shaft, needle bearing

Question
I have an 86 Samurai that I have been doing some light off roading with, all stock, and lately, whenever it is in 4WD low and there is wheel spin (front wheels), there is a popping noise (loud) and the transfer case physically jumps into neutral. Also, when it is in 4WD high, and there is wheel slip (front wheels) the transfer case shifter attempts to jump fwd, but since it is already in the full forward position, the popping sound continues and the lever continues to jump fwd until the wheel slip stops. There is no effect when in 2WD. Just want to know where to start, if this is a front diff issue, or just a transfer case issue. Was thinking maybe fwd output shat?

Answer
You have probably hit it right on the nose.
The operating sleeve (an internally splined sleeve that has a groove for the shift fork on the outside) and the output shaft can shift in relationship to each other and do what you describe, that is pop out of 4wd.
The solution is new bearings everywhere in the t-case (there are kits available, and it's not that hard to do yourself especially the little needle bearing that supports the inside of the output shaft for 4wd) AND a newer, sturdier output shaft.  These are all available at:
rocky-road dot com
trailtough dot com
hawksuzuki dot com
I unreservedly recommend any of the three.
Rocky Road and Trail Tough also have many other parts to modify your Sammy, and Hawk has more in the way of stock parts.
Make certain the u-joints in the front driveshaft and the slip joint are in good shape, as that can make the pop out of 4wd worse.
Go to izook dot com, and you will find more sources.  If you wish, while your T-case is apart getting new bearings, there is a company, "evil twin" that can sell you a double shift stick kit that will allow you to select 2 or 4wd with one stick, and high or low range with a true neutral between them.  I have it on mine, and also recommend it while you're already inside the t-case.
I've probably spent enough of your money at this point.
If you look around, you can find a free download of an '87 Samurai factory manual, which is essentially identical to yours.
(Mine has the 6 to 1 t-case gears, 4.71 diff gears, lockrite lockers (cheap and REALLY useful) Birfield rings (necessary with front lockers) a power steering kit that comes from a sidekick that works well, and a spring over kit that uses Wrangler springs.  Way overkill, but it works for me.)
Scotty
Let me know if you have more questions