Transfer Case or Transmission? No reverse gear.

Spent a couple hours reading through threads and not much resolution found yet. I figure i would throw this out there for feedback, while i start searching through the factory service manual for troubleshooting or repair ideas...

Last night got home and backed up my driveway as per usual. Shut off the XK and when i opened the door i heard rythmic clicking from underneath. Never heard before. Started it up again, and the clicking was still there. Shut off, again and stayed the same. I crawl underneath and echo-located it to the Tcase solenoid, then confirmed by feel thats what was in an endless loop of clicking.
Started up again, drove fwd and reverse 5-6' up and down the driveway. Shifted into 4Low and repeated fwd and reverse. Back into 4Hi, and disabled TCS & ESP, repeated fwd/rev, all with no change to the clicking. Shut it off and tried disconnecting the wiring harness but couldnt cuz i need to jack up a bit to get more leverage. While pulling on the connector i did notice the clicking pattern changed pitch & interval so now starting to suspect a short or other wiring issue.
i disconnected the battery & figured i can reconnect when i go to work and disconnect as needed to keep from burning up the solenoid or draining the battery. Cleaned up both Optima terminals and waited 10 min before hooking them back up to test. No click ! i then tried starting it up, and instantly starts clicking again. Disconnect/reconnect battery again and good. No click. I put it on the to-do list for today.
This morning on the way to work cruisin at about 45mph i hear a wierd buzzing sound for less than a second, almost like a garbage bag flapping fast in the wind. No change in driving or feel at all, just enough sound to be noticed.
I get to backing in my spot at work and hear a horrible grinding ongoing clatter when i shift into reverse and try to back up. I put into Drive and it stopped, put in reverse same grinding and no motion. Couple guys helped me push it back in neutral, and when i put in reverse to listen to the sound again, and i had reverse gear back...
Its very strange that what seemed to be a Tcase problem multiplied into Tranny ? No way that could be 2 random coincidental separate failures right ?
For all other driving up til now, shifting is crisp, quiet and smooth in all gears... now to start digging into 5000 pages of service manual...