Driveline play...E53 4.4i 2001

[frozenwaffles]

Hi guys, so i need some help with a driveline issue.
First thing to note is i have recently had my transmission rebuilt.
Now my issue is this:
When driving along, if i slow down and coast for a little bit....then apply acceleration the X5 has a slight slamming as it goes into gear, i would call it driveline backlash.
When i leave form a dead stop this does not happen.
Recently when i was under the car with the front wheels off the ground, i noticed i could move the front drive shaft quite a bit...lets say about 2 inches of wheel rotation at the point where the tyre touches the road (if that makes sense).
Does this sound like a transmission issue or a transfer case issue? Or Should i be looking somewhere else? Diffs maybe?
As far as the play in the drive shaft...its very clear this is coming from the transfer case.
If i replace the chain in the transfer case, does this also affect the rear driveshaft, or is this shaft in a direct connection with the output shaft from the transmission?
I am not hearing any pops or strange noises from the transfer case...
I will get the X5 on her rear stands this weekend and check the rear shaft for play (and also change the rear diff oil) and report back