Your car being a 2005, the trifecta lights could be from either the transfer case actuator motor gear or the ABS module itself going bad. Your quickest way to know which caused it is to scan for codes. From your description of the front wheels acting weird, my bet would be on the ABS module. This was my problem a few month ago on my '04. Google search on ABS module repair as there are a few shops that can perform this repair for you.

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2004 X5 3.0i
Born 02/04
Delivered 03/04