Advice requested: grinding, rattling driveshaft/transfer case issues

Hi everyone. I've recently put my '67 2A into service as my daily driver (it's been an occasional summer rig for 8-10 years) and I'm playing whack-a-mole with problems as they reveal themselves. On the ride to work this morning, a big one popped up.

Background:
I've been hearing a faint new scraping noise recently from right under the middle front seat - somewhere around the drive shaft / transfer case / parking brake which increases and decreases with the RPM of the wheels. Last time I heard something similar, it was the bell housing for the parking brake scraping against several broken brake parts inside (springs, etc), which I took out. When I reattached the housing, the noise went away. I haven't replaced the springs, adjustor, etc so I have no parking brake currently - not related to this.

Also a couple of times recently I heard weird scraping/grinding noises which were the 4wd becoming partially engaged and were solved by stopping and shifting into and out of 4wd.

Problem:
Then, today I was cruising along (still hearing that faint little scraping noise) when all hell broke loose from the same area - grinding, bolts-in-a-can rattling, etc. I pulled off the road, shifted into and out of 4wd and discovered that the yellow lever would not stay engaged (down) - I'm not sure if this is related. This didn't really help, but I was able to limp it home.

I can still shift fine - feels as smooth as ever, car tracks, steers, accelerates, brakes fine. I pulled the center seat out and eyeballed it quickly and didn't see anything obviously wrong (to an amateur eye), no fluid pouring out, etc.

I'm about to go dig into it and I'm hoping to get some advice as to how to go about eliminating possibilities and narrowing in on the culprit (or culprits). A warning: I'm working in a dark, poorly equipped garage - even little things take me a long time.

Thanks in advance!

Just because its easy, check the gearbox mounts first.

Try pulling the handbrake drum backwards and forwards if significant movement possibly circlip has failed on front output side of rear drive allowing the gears to move out of line.
Is your high low ratio lever fouling the bulkhead ie not letting lever detent ball engage on the slot in selector shaft.
Does the yellow knob operate correctly.
What happens if you put Hi low lever in the central /neutral position and run through the gears with no output to wheels.

Thanks Blackburn. I will try checking the handbrake movement this afternoon - I don't remember any slop but I could have missed it.

1. To your question about the high/low lever: it is not hitting the bulkhead, if that's what you mean, although it does rattle around a lot above about 35 mph - I've taken to resting my toe on it to keep it quiet (this problem has been then for at least ten years).

2. The yellow lever goes down and comes back up alright; it just doesn't stay down. The last time I used 4wd was maybe 6 weeks ago and it worked fine.

3. Not sure - will try this today.

Cheers,

Might be worth taking the little cover off end of front output casing and check shafts are functioning as they should see attached.

Thanks for the handout! This will have to wait until I can get under there and poke around. I assume this means draining the fluid (it's not just an inspection port)?

It’s just a mud/ dust cover held on with 2/3 screws so just remove and clean crud off, and grease up a bit

You need to take the 4wd lever piece off to get the pin out of the cover also the nut off the hi/low shaft.