I agree with Trader4. This problem is usually associated with high mileage vehicles which yours is not. I would rebuild the transfer case as you intend to do. I would not go to the longer spines. Reason being the stock parts, other than the plastic gear, usually last well over 100,000 miles. Maybe the previous owner was pulling stumps with it to tear it up that soon, who knows.

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X5 4.6 2002 Black Sap, Black interior. 2013 X5M Melbourne Red, Bamboo interior
Dallas