From my understanding of the TOD system the chain that drives the front end is only engaged in low ratio which is centre diff lock so to speak. in high ration the chain is not engaged but the electromagnetic clutches drive the front prop.......... i may be wrong
The popping you mentioned could be CV, although you should be able to clarify this buy putting it in low ratio and doing some S bends, if you here some crunching on tight turns the CV's are dead.