I have never had a problem with any NP203 transfer cases, but maybe I've been lucky? The last few years (77-79) of the NP203 had a better chain, so that might be an upgrade. I've always liked the AWD of these (all the rage these days), even though everyone seems to want to part time them. If you do change to a different transfer case, I believe the output shaft in the transmission is shorter when coupled to a NP203. You'll need to change the rear shaft in the transmission to hook it up to anything else. A part time transfer case, you'll probably want locking hubs too. That's changing from the knuckles out.
So, here's an idea for you. My project truck has a 203/205 doubler transfer case. It uses the NP203 range box, an adapter, and a NP205. This way you don't have to do anything to the transmission, and you get 1:1, 2:1, and a 4:1 ratios. You already have the NP203, so you just need the adapter and a NP205. This combination is only 1/2" longer than a NP203, so you might not even have to modify your driveshaft.