Be sure to read this section on the transfer case rebuild from the tech articles....the tech section has pictures....
D21. Drive the front bearing forward enough to use a set of flat-bladed snap ring pliers to move the output shaft snap-ring forward, and out of the groove. On some T-cases this bearing just slides forward but many others require force. The book calls for using Willys Tool Model_18_Rebuild/w139T.jpg (2525 bytes). I made my own� Model_18_Rebuild/RicksW139T.jpg (2446 bytes) from a cheep steel hatchet, by cutting the middle out of it with a grinder. It worked great.� Model_18_Rebuild/HatchetToolT.jpg (3032 bytes)� Once it was driven in between the gear and the bearing I was able to gain more clearance by tapping on the side of the hatchet blade. By using cheap (soft) steel, it is less likely to damage the hardened steel shaft or bearing. Caution: Failure to move this snap ring out of the groove has resulted in people cracking their cases. The snap ring can not be seen until you drive the bearing forward on the shaft and this can not be done by using a press on the end of the shaft
http://www.cj3apage.com/index/Tech_Tips/Model%2018%20Rebuild.htmDoug's write up has assembly pictures that show the snap ring being installed...
http://www.cj3apage.com/index/Tech_Tips/DougHD-18TransfertCase.htm