I finally uploaded the DIY video for repairing the transfer case actuator with a new gear. I completed the repair in December 2015 and we have had zero issues since!

The BMW service centers will tell you that the entire transfer case needs to be replaced at a cost of over $4,000 simply because they do not replace the actuator motor or the plastic gear inside it.

We also did a drain and fill of the transfer case with fresh BMW fluid after replacing the gear. Hope this helps someone get back on the road!