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When i shift it into 4 wheel the knob feels way to easy to move and it clunks really loud even going 2 miles an hour what could this be.
 

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You'll have to be more specific. When you say you are shifting to 4wd, are you shifting in 4 Hi or 4 Lo when you hear this?

The transfer case you have should be an NP231. This is a t-case that has shift-on-the-fly capability. This means it can be shifted while on the roll, however there is a right way to shift and a wrong way to shift.

First the right way. You can shift into or out of 4Hi, up to a speed of 15 mph. You must shift into 4Lo from a dead stop. Low gear inside the t-case is not synchronized and attempting to shift into or out of 4 Lo on the roll can cause the gears to clash.

When you shift into 4 Lo, you might have to back up a couple of feet (or spin the tires in reverse) to unbind the drivetrain, if you've been driving on a hard surface. And never use 4wd at all on pavement, unless you're using it to negotiate ice, but you must shift out of 4wd once you're back on pavement.

Ok, assuming you already know this, there are several causes for a clunk. It could be weak, loose or worn transmission/t-case mount.
It can also occur, when you're shifting into 4Lo, because sometimes the transmission output shaft is still turning and the Lo range gears doubles engine torque. When you shift there is a clunk (It can also happen when shifting into 4Hi, from a stop, but will be much less)

It can also be from somewhere else. Some Chrysler rear axles are known to clunk. These axle tend to possess more backlash than other makes of axles. (And is normal)
Again, when you shift into 4lo, that clunk can be more pronounced than when you shift into 4Hi.

Ed
 

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I have a 97 and when I would shift from 4wh into 2wh I would get an awful clunking sound. Broken CV axle. Maybe this is helpful?
 
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