When I am in 2WD and accelerate from a dead stop, the gears in the TC are grinding. As I reach a cruising speed or take the foot of the gas, the grinding stops. I could also be going, say 40/mph, and start accelerating, the grinding will starts again.

Try moving the t-case shifter around and see if that makes the noise go away. I had to have mine adjusted once for a similar problem.