Just a quick update but first i want to say thank you for being so informative. I appreciate relying on my brothers on the forum for help.

I went to an indy BMW Specialist earlier today. Without mentioning what I heard previously from the BMW Service Center, the mechanic checked the CBS and quickly confirmed, the oil needed to be changed in the transfer case. He mentioned its a routine maintenance. The vehicle generally alerts the driver when its time to change the oil. He quoted be $80 labor plus the oil.