2004 Sierra 2500 metal grinding and truck shaking
 

Wife had my truck and pulled off the highway with major vibrations. I went to check it out and moved the truck 15 feet in reverse then forward and had loud metal clanking and truck jerked bad. I looked under it and the transfer case looks wet. Looked up online and found they have a known issue of pumps wearing a hole in the case and losing the fluid.

If this happened to mine, do I need to rebuild it or can I disconnect this somehow and just use the truck 2wd? It has the electronic push button 4wd on dash. top round button is 4wd as needed then 2hi 4hi and 4lo. If it is making the loud clanking sounds and truck is moving clunky even in neutral does this sound like a complete rebuild or broke chain or something else? Im handy with tools and learn quick but this is my first 4wd issue ever.
Thanks for the help

If the transfer case has a hole in it then it needs to be replaced or fixed. No you can't drive it in 2wd mode since the drive is still thru the transfer case.

Check axle
 

It could be a broken pinion or ring gear in the axle they will have the same sound and vibrate like its unreal but as for the tcase if its broke definitley replace it rebuilding it with a hole in the case is more expensive than a used one.