OK - here is me nerding out on this ( as I have been looking to convert my 203 for some time ). There is an excellent ( old ) article by
@Grim reaper on the .ck5 board, that describes the transfer case mechanism, conversion parts and real world driveability that you should read. A google search will bring it up.
Basically the "full time" 4x4 worked using a chain driving a differential. The pic below shows the OEM differential at the bottom.
The doug Nash / mile marker ( MM ) conversions either replaced the spider gears in the diff ( the #501 kit ) or replaced the entire diff altogether with a shaft ( #503 kit - shown at the top of the pic ). By replacing the diff meant that drive can now be positively engaged / disengaged to the front axle assembly, which in the full time ( factory / oem ) setup it cannot.
Np203 cases are extremely durable, despite having a chain, rather than gears. The issue is that they are often not cycled through 4wd Loc enough, and therefore dry out causing chain and bearing wear. Disconnecting the front shaft therefore will also promote wear and eventual failure.
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The MM #503 ( shaft ) kit is much stronger than the #501, and therfore better for hard core off road / bigger tyres etc. because it eliminates more parts. The #501 kit ( below ) is still available however. There is one advertised on Ebay right now, - again if you google search they can be found much cheaper.
If you want part time, read the CK5 post, and install at least the #501 kit. Ensure seals are replaced and fluid is clean and topped up, then regularly cycle the transfer case through all 4wd options ( high / low etc. ) eg. weekly for a minute or so, and the case will last forever and 2 wheel driving will be possible for the bulk of the time if that is what you are looking for - without dropping the front shaft. The #501 kit is shown below. Post pics when you install, as that will be helpful to others.
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