Dealer service means nothing to me after the car reaches 50K miles. Few dealers service Haldex units, flush trannies, or antifreeze in a timely fashion.
Yes, the rear drive spline in the xfer case can get stripped, usually when over revving and then hitting dry pavement with full grip!
A broken rear axle can also cause the rear diff to spin and not move the other wheel. A 'snap' in the rear could have been a broken clamp allowing the axle to slip free of the diff??
Spoke many possibilities...
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Keeping it running is better than buying new
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