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I can't beleive no one has mentioned a clogged cooler/filter. Sorry I wasn't following along on this thread earlier.
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This doesn't make sense to me. A clog anywhere in the tranny or filter should not increase the transfer pressure. The transfer valve has two spool valves. The first one is a pressure regulator and it regulates the pressure to the 2nd spool valve, the transfer valve. The transfer valve applies the pressure to the transfer clutch plates.
The regulator valve is required because without it the transfer presure would be going up and down as the line pressure changed. Another way to look at it; pull the line pressure resistor and the line pressure increases. The transfer pressure does not increase.