That indy should be ashamed. Gear + gear oil change and you are back on the road for less than $300 parts + shop time. And that's generous to the shop but at least fair to the customer. They could warn you that it may not work but that they would recommend trying that before a new transfer case. $300 vs $3400... that's a no-brainer roll of the dice.

__________________
2005 X5 4.4i Build 04/05 Maintenance/Build Log
Nav, Pano, Sport (Purchased 06/14 w/ 109,000 miles) (Sold 8/15 w/121,000 miles)

2006 X5 4.8is Build 11/05 Maintenance/Build Log
Nav, DSP, Pano, Running Boards, OEM Tow Hitch, Cold Weather Pckg (Purchased 08/15 w/ 90,500 miles)

2010 X5 35d Build 02/10
Nav, HiFi, 6 DVD, Sports Pckg, Cold Weather Pckg, HUD, CAS, Running Boards, Leather Dash, PDC, Pano (Purchased 03/17 w/ 136,120 miles)