Thanks man... Sure wish i'd read your reply this morning as I'm now the proud owner of a W56-C and transfer case from an '89... LOL. With my luck it'll turn out to be a U-joint after all... Even though I checked them and they're all tight with no slop or wiggle, but who knows, maybe the driveline was a bit bound up at that point...
Anyway, I suppose I could always re-sell the W56 if I don't need it. Or, maybe I'll just install it anyway. After all, it's an "upgrade" and a stronger tranny, right?
as for interchange - According to Marlin's bible, the early forward shift trannys & t-cases had 4.5" for what's called "offset". Later ones like this one I just bought only have 4". I won't know anything for sure 'til I drop the tranny that's in the truck and compare it with this one I just bought, but my guess is that the shifter is in a slightly different location, probably 0.5" further back on the tranny and thus the shift forks are a little shorter, which would mean you can't easily interchange these t-cases. Also, it looks like Toyota just kept the same housing casting while changing other stuff as this t-case on the W56-C has a place to mount a shifter in the top-shift position, it's just blocked off with a plate. Makes me think it might be possible to convert a top-shift t-case to forward shift, and vise-versa to match the transmission you're going to use it with.
I have converted a few from top to forward and vice a versa, its definitely possible