Drain and refill Transfer Case with New oil... Old oil after 50k KM was very dark. Reset Transfer Case Oil setting for new oil using DIS ( very important ) and then drive for 100 KM in varying conditions (in traffic and on Highway ) so Transfer case can adapt the clutches . After I first changed the tranfer case oil and took it for a drive , problem of slipping/ shudder was still there but not as bad as before. After driving for 100 KM car now back to normal... Hope this helps someone. I also checked my actuator gear also but it looked fine and the OD measured the same after 8 measurement in different spot, sit.o I did not change

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2005 E53 4.4i