I initially notice some fluid under the car... but it happened at the same time one of coolant pipes went (so I did not pickup on it).
The fluid I noticed seem to be fine and clear.

As for how I determined there is something wrong:
- cost the car from 15 miles/hr, 10 miles/hr and 5 miles /hr to stop and listen to a clicking sound like if a wheal drive axle is failing.
- while costing car put it in neutral gear and observe no change in sound
- while costing turn wheels left to right and observe no change in sound

Parts are ridiculous.
- transfer case: about $2800
- front drive shaft: almost a $1000

There is a possibility to rebuild those parts (I'll try to post that contact info here later)