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I'm one of those people who have had issues with the transfer case. About 2-3 years ago I had the transfer case flushed on two separate occasions about 3 months apart. No problems since.
I'd have thought as a first measure you should try flushing the transfer case which will be far far cheaper and far far easier than what appears to me to be an "over-the-top" first-up option of replacing the transfer case. And try and get it done at a garage other than the two garages that are recommending you replace the transfer case.
Tony
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