The chances of the front axle being faulty are pretty slim (unless someone has put the wrong ratio diff in, which I doubt), but the transfer case is faulty, or the tyres are too far apart in circumference, causing wind-up, and the banging noise is the centre diff jumping.
I believe there is a place that reconditions the transfer cases at a reasonable price (£700 @ http://www.4x4gearboxes.co.uk/price.php ).
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