Yes it can stretch as it did on my YJ, new chain from Lighthouse and the old one side by side proved this, there is very little clearance between chain and case so tiny bit of stretch will be heard as ice in a blender.
Also if you have a locking device as I did or even a lsd in your front diff the front prop WILL turn even if transfer case is in 2wd. this will cause the chain to spin unloaded and you will eventually hear the ice in blender noise again also you WILL end up with a mullared front prop. How do I know???!!!!
Easily fixed.....money... free wheeling warn hub kit very excellent piece of kit, and or look for a Dana 300 and flip it, no chain just gears as it should be. also excellent.