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2001 Volvo AWD transfer Case problem

I have a 2001 Volvo AWD with 160,000 miles. A couple weeks ago we noticed a funny "bearing noise" while travelling, mechanic checked it out, thought a front axle bearing.

Now, my son was driving car and it sounds like you are dragging an iron girder under the car. Had it towed to mechanic, looks like the rear output shaft bearing started to fail, the vibrations ground up the internal gears and it actually banged a big hole thru the casing.

Is this normal wear and tear?? Mechanic wants to replace the whole transfer case for 2,000 (mechanic is a highly trusted person) just looking for options, and thoughts on this being normal wear and tear or what.

Would appreciate any posts. thanks.






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