4-WD to NO-WD without warning; any suggestions?

[Marc Troy]

While traveling at a modest 55 MPH, my 78,000 mile 2000 X5 suddendly felt like it shifted itself into Neutral without any warning. I was able to get to the side of the road and, while waiting for a tow, found the following:
Regardless of the gear the selector was in, the transmission acted as though it was in Neutral.
When the selector was in Park, it still "rolled" since I was on a slight upgrade.
I'm hesitant to bring it to the "stealership" since their typical diagnosis is "Replace the part" and in this case it's the transmission or the transfer case - my wallet is beginng to hurt!
Any suggestions? Thanks...

[Weasel]

If it is an 03 or earlier it is likely to be the front output splines on the transfer case. Yes the dealer will want to replace the whole t-case and front driveshaft for that, but there is a kit to fix it out there... Search for the threads on here that have the info for getting the stuff.

[Marc Troy]

Thanks Weasel but if there's a failure of the front output splines on the transfer case wouldn't I still have rear-wheel drive? I've lost all four wheel drive and the ability to keep the car from rolling in Park...

[Weasel]

The transfer case is set up with planetary gears and pretty much acts like an open differential, the DSC uses brake intervention to transfer power to different wheels in low traction situations. So if it loses connection to the front axle the rear won't get any power either.