E53inLA, is yours an 04-06? If so, and you are getting the tale-tell clicking and lights trifecta, and autologic, DIS, or another program is pointing to the transfer case, I would think its the gear in the gear in the actuator [and replace the tranny fluid, ECS kit - how many miles on yours? Ever changed before?] before letting anyone sell me a transfer case replacement, new, rebuilt, or otherwise. Are you sure the gear was replaced properly? The fluid change won't fix the lights trifecta: replacing the gear will, as this thread [look to the linked youtubes and guidance] shows. Of course, the diagnostics aren't perfect; like I was prepared to do, you might want to try another shop using different technology [DIS or autologic, for example] if you replace the gear and aren't getting the click. Could be the ABS module, a sending unit, etc. I'll be a surprised and very disappointed shade-tree mechanic if my replacing the gear Friday morning doesn't do the trick ........

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2006 X5 3.0 6-spd w/Evo UUC ssk
sport/premium pkgs
born Valentine's Day, 2006.