there is a snap ring that holds the transfer case to the tranny. you have to pop off the x-fer case in the same way you would pop out an axle. stick the pry bar inbetween and give it a good hit and it should pop right off.
p.s. dont sit directly under the x-fer case, you dont want it to drop on your face
p.s. dont sit directly under the x-fer case, you dont want it to drop on your face