Have quite a vibration when I hit about 50-57 mph. Mech seems to think it is the driveshaft bushing. Can move it up and down a little so I am ok with that diagnosis but my question is this....Can I replace just the bushing itself or do I need to replace the transfer case housing?(which a Mitsubishi dealer told me I should do)

 

You didn't mention what vehicle you own.

If I was having issues like you described with my NM, I'd first run through the diagnostics from the FSM for my rig.

http://www.pajero4x4.ru/piii/GR00001600-25.pdf

Then I would move on to the transfer case if needed.

http://www.pajero4x4.ru/piii/GR00004100-23B.pdf