Mystery part on rear driveline

[AirSpeed]

For the last week I have been hearing a strange sound coming from the rear of my 72 GMC 4X4, it was a clanging sound that today started making an additional squealing sound. I searched all over under the truck many times through the week and finally today found what I think is the culprit. There is a circular steel half donut shaped piece on the yoke coming out of the transfer case, the "hollow" side is towards the transfer case. I'm guessing it's there to protect the seal on the transfer case? I dont know but I would like the noise it makes to stop! Is this part supposed to be attached to the yoke somehow? Is it supposed to spin with the yoke? The squealing sound is from it spinning on the yoke until it catches up with the spin as I accelerate, the clanging sound I assume happens when I accelerate as well, I think it happens when it spins with the yoke and taps against the rear of the transfer case.
What can and should i do with this part to get it to stop making noise? I also want to change the lube in my NP205 and the front and rear axles, Do I use 80/90wt gear oil? Thanks for any suggestions! Aaron