The issue is actually between the output shaft on the tranny and the input shaft of the transfer case.
Is your Defender really stamped #38? If yours is really that low, and you have an R-380, you'll probably already have the fix done to solve that. If you haven't, the input gear for the transfer case is a quickie drop-in and the rebuilt tranny will cover the transmission shaft.
My oil line fix
My 100k stopped odometer fix
Brace for impact, I'm in a "modifying mood". Massive thread count inbound.