2x on the sye kit!
Even with lowering the transfer case your u-joints are probably past max angular deflection. Also, lowering the transfer case can, in some situations, make things worse. Drive shafts work best if the input deflection angle is the same (but opposite) as the output deflection angle. Ie: if the angle out of the transmission is, say, 3 degrees down, the pinion connection ideally should 3 up. This is less of an issue when the defection is small but becomes more of an issue the steeper the angles. Variations up to 1 degree are no big deal but above that the vibration will increase the bigger the difference in the two angles. If you want a real in depth discussion check out http://www.hotrodhotline.com/md/html..._harmonics.php
. or Tom Woods site: http://www.4xshaft.com/driveline101.html
. Both go into great detail.
Otherwise, I'd say at least a sye kit and possibly add a CV joint in your new longer driveshaft.