Yep. Mine is leaking on both sides but doesn't have play in it like that. Im considering removing it and the transfer case. AWD is pointless for the most part and heavy.
Did mine, LOVE it so far. There is so much more room to work on stuff under there! Can see pics here:
http://www.tahoeyukonforum.com/threads/yukon-down-awd-delete-headers-converter-etc.81191/