1996 GMC Suburban Car moves, but then stops from lound clun

I started working on this vehicle 2 days ago, because it would not want to go in gear with out giving over 2k rpm to engage in gear. I had to add 2.5 quarts of fluid. Started up the vehicle, went through all gears. Every gear engages, when engaging from FORWARD to REVERSE, there is a loud clunk from underneath the car. When I try to move, the car rolls a foot or two and stops (loud noise from underneath, like a clunk.) I then, go forward and the car rolls 2 feet and same thing, a loud clunk/pop and the car will not move without giving rpm. (Rear diff is good, all u joins are fixed.) I am thinking something went very wrong in the transfer case and something might be binding? Thanks.