'78 K15 w/203 problems

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I just bought this truck yesterday after a short test drive and got a ride back to pick it up but then I didn't think it would make it home.

T-case is grinding popping and banging, literally sounds as if the chain is jumping teeth.
Has manual hubs which were unlocked. Seller claims that there was a sweet-spot for the range handle that prevented the minor grinding when he drove it and his "mechanic buddy" says that it "just needs adjusting" !! (this guy owned it less than one week).

It shows 66,xxx miles which I assume is 166,xxx miles and the case is high mileage.
1. Could be the high wear from mileage ?
2. Could be from the previous owner driving in 2 high too long without re-engaging high-lock to lube the rear bearing ?
3. Can't be an adjustment !
I'm going to try and reason a settlement with the seller as I am supposed to get him a new bottom section for his 16' wood garage door and install it (a job worth $375), but I've already paid the cash part of the agreement.

It's a High Sierra , pretty original but with a strong rebuilt 350/4bbl, th350, PS/PB/air, sea mist green, and has it's original ralley wheels on her. Not a rust bucket but it definitely has some.
Sorry but I don't know where my digital camera is lately.

I've already found a rebuilt 203 27 spline for about $125, but I aint paying for any labor.