2000 GMC sierra ticking problem

I am having problems with my 2000 GMC Sierra Z71. First, it is having trouble coming in and out of 2wd. Since we went 4x4, it cant seem to stay in 2wd. Also, it has a ticking noise coming from underneath when the car is in motion forward and especially backward. We thought it was a bad chain in the transfer case and installed a complete new transfer case, but we are still having the 2wd/4wd problems and ticking.

It sounds like an issue with the mechanism up on the front differential that engages the front driveshaft. Jack up the front, with the truck in 2WD and off, and have two people turn the front wheels in the same direction. While they're turning, go underneith and look to see if the front driveshaft is spinning. It is not supposed to be connected to the front "axle" gears when the truck is in 2WD. If the driveshaft spins, there's your problem.