hey guys, we took it to jeep and found out what it was.. It turns out, when a car has been used as a shopping trolley and never been in and out of 4wd the bush at the end of the transfer selector cable hardens and wears out, so when u finally try it, it crumbles.
Jeep want $570 for a new cable, (or $190 + shipping from the states) as they dont sell the individual bush, only the whole cable, so i'll either fab a bush up or buy one from the states..