[RikRotorhead]

Your YJ does not have it in the transfer case.
When you put the transfer case into 'neutral' it is not totally freewheeling or in true neutral. The front and rear drive shafts are still connected just like in 4wd.
The only time your YJ front and rear drive shafts are NOT connected is when the transfer case is in 2WD.
This can be proven by putting your YJ up on jack stands and placing the transfer case in neutral.and the transmission in neutral. Turn the rear wheel and the front wheels will turn also.

Why is this even a subject you ask?
This information is for both the manual and automatic transmission.
But it is MUCH more important if you have an automatic transmission, even if you DON'T have a locker.
If you flat tow and you have a "lunchbox locker" like and Aussie Locker or similar, it will make your Jeep travel all over the road, because the drive shaft is engaging the locker by the rear wheels turning the front drive shaft. The input from the front drive shaft is what engages a lunchbox locker.

In the TJ they made a slight modification to the transfer case that solved this problem. They changed the shape of the mode selector plate by putting a big dip in it. The mode selector plate is different and that is all they changed.

The mode selector plate moves a fork in the transfer case that selects 2wd, 4 high, neutral, and 4 low, by sliding a ring along the main output shaft spline.
There is a position in both the TJ and YJ transfer case that the ring does not engage the front drive shaft besides the 2wd position.
This position is called "true neutral".

There are two ways to achieve true neutral in your YJ transfer case.
1. Go buy a mode selector plate from a TJ transfer case.
2. Remove your mode selector plate and grind a large dip in the exact position the TJ plate has it's dip to place the transfer case into true neutral.

 

[RikRotorhead]

Here you can see the difference between the TJ (top pic) and YJ (bottom pic) mode selector plate......
The four bumps on the left side are just detents for you to know when you have the t-case in what position and it kinda holds it there. The little metal thing with the spring on it is what travels between the bumps. It's what is behind that large nut that looks like a drain plug on the bottom of the t-case.
The bump on the top right is what tells the vacuum switch that you are in 4wd to illuminate the light on the dash.
The big dip on the TJ plate is where the true neutral is. As you can see there is no other difference between the two plates.

 

[RikRotorhead]

Notice the pin of the rear mode fork is in the valley of the true neutral plate (A). This is the dip in the plate that allows the main shaft gear selector fork to drop to the position to allow the selector ring (B) to drop down below the front output chain drive gear (C). You see in the pic at (D) the ring is just below the gear. This allows this gear to spin freely on the shaft.
Without the dip in the plate, the ring would sit higher and cause it to be connected to the gears below it, thus spinning with them because the rear drive shaft is spinning the main shaft and those gears are directly connected to the shaft. Gear (C) spins freely on the shaft.
The pin in the slot of the plate (not visible in this pic) has not changed. It still dosconnects the transmission from the transfer case.

Does that make sense?

 

[Xpress]

How hard is it to remove them ode selector plate to cut said groove into it?

 

[Otahyoni]

Going by the pictures it looks like you'll have to split the case. I'm not sure how involved that is, but i would imagine some might feel more comfortable swapping the entire transfer case instead.

 

[RikRotorhead]

Nah... Pulling the t-case is easy. If you have a socket set it comes out very easily.
The biggest challenge is the nut on the front output shaft, but wiht PB Blaster and/or an impact gun or socket and breaker bar that is not even difficult.
To remove that nut just place a piece of wood between the front yoke and the case of the transfer case. The wood acts as a block to keep the shaft from spinning.

Once you have the case out and the yokes off, taking the t-case apart is a matter of some bolts holding it together and possibly some silicone glue.

IMPORTANT: That nut on the bottom of your transfer case is NOT the drain plug. It is holding a spring and a pin that applies pressure to the mode selector plate.
The drain plug is right next to the fill plug on the back of the t-case.

When you have the t-case open it is really obvious where the mode selector plate is. You just tap it out with a plastic hammer or mallet. Caution,... It does have an o-ring on the outside. Don't lose it.
When you have the front yoke off it allows the shaft to move enough to release the drive chain. You don't really need to take the entire thing apart. Just remove the chain to gain access and then replace the mode selector plate. Reverse the process to re-assemble.
Really it's easy if you can swing a wrench. The t-case is not heavy, probably fifty pounds if that.

As far as cutting the dip into your own plate, yes that can be done. Just make sure you put the dip into the exact spot.
Here's what I did: I went and bought a TJ mode selector plate, I took it home and traced it onto a plain piece of paper. I then cut out the pattern and layed it on the new plate carefully lining everything up. I used a black Sharpie and drew the dip onto the plate. I then put on my safety glasses and went to town with the grinder. When it was done I fine tuned it by trying it in the case. I then modified my template to be exact and made several more plates from stock YJ plates.
I also put the new TJ plate back in the box and took it back for a refund of my $72. Pretty sure it's legal.
Presto-chango I now have a true neutral in my YJ.

 

[Chris]

Going by the pictures it looks like you'll have to split the case. I'm not sure how involved that is, but i would imagine some might feel more comfortable swapping the entire transfer case instead.

You would be amazed with how easy and simple pulling one apart is. I can have one out and stripped in about a half hour.

I rebuilt my ford one even easier.

 

[RikRotorhead]

Update!!!

The plate is now available at Summit Racing for $24.95 plus shipping.

Brand Omix-Ada
Manufacturer's Part Number 18676.32
Part Type
Product Line
Summit Racing Part Number OMX-1867632
UPC 804314030582