1998 Ford Ranger 4wd Xlt

Help

Sound like one of your hubs are not disengaging all the way try removing it and take it apart, clean all parts very well, lubed them with new grease, and reassembling it. That might be all you need to do

Now, it only happens when the hubs are Free not Locked because when they are locked, its fine but you think it might just need some lubrication to stop the grinding noise ?

Yes. If the hub is not disengaging all the was. Their are gears ( or teeth) in side and might be rubbing together when they should be apart from each other. Kinda like with a stick shift trans and you try to shift gears without pushing the clutch in I would take in apart. Clean it up real nice relube it. Make sure all the parts are moving nicely and put her back together. Won't cost much but time. It it doesn't work nothing ventured nothing gained. But then you are most likely have to get a hub kit if this is what you have going on. Hope it helps and good luck. But I think you can handle it