I really don't like seeing you say "I'm very curious about this case" :rofl:

Keeping in mind, you've educated me a lot so far!

My rear axle came in today (different problem, different thread). When I get around to putting that in, I'll see if I can do some troubleshooting.

Thanks for the ideas and suggestions guys, it's much appreciated. My friends think I should dump the car and I keep telling them "But I honestly enjoy working on it". Much more so than anything else I've ever owned. Plus, I've almost replaced more parts than came on the car, so we're approaching new status ;)

It's a nice car to work on. My favorite of dozens. If gets pretty high anxiety when there are mystery transmission or O2 errors but the good old problems like thermostat, suspension etc it's fun to solve the problems and feels very rewarding

Just for reference, I ran a full scan on it and the only transfer case error is worn oil. No other errors being reported in that area.

my 04 trashed the splines on the front shaft, drove it like that for a long time(winter) before fixing it and never gave me a code.

From the look of the splines on the Tcase, they look good. I would bet someone wanted a rear wheel drive only X5 or something stupid.... and just took it out.

You want the longer spline shaft and with that you will probably have to pull the rear shaft out and loosen the bolts on the Tcase and slide it back about a 1/4 - 1/2" or less to get the new drive shaft in.

There was a guy on here that you would send yours to and he would lengthen but that wont do you any good