Just as a follow up....I replaced the gear pictured above with a good used gear from Herm and the noise is all but gone...The transfer case is pretty quiet in all gears with just a hint of a whine at around 40 mph....I'm guessing that if the intermediate gear was that worn the output shaft gear must also be worn, and is probably the source of the slight whine at about 40....but I did not change it..that would require removing the TC....
So I'm very pleased with the result.
Here are a couple pictures of the bore of the gear I removed, same as the gear pictured above..