a few pics from my transfer case rebuild:
The case had been run completely dry of oil, none of the bearings seemed to be in good shape but the rear output and the low range roller bearing in particular were really bad.
as noted before, the case would run ok in 2wd but as soon as it went into 4 range low or hi, it would make a popping sound when put under load.
The chain was stretched so bad, it was skipping over teeth on the front output shaft and smacking the side of the case. this is what caused the hole in the filter screen.
I installed a full master rebuild kit, plus a new chain, new range fork and a new pump. The range fork I replaced because there was about half of the plastic pad material worn off. Unlike the mode fork, the plastic pads on my range fork were molded on permanently, and the pads included in my master kit would not work. I took a little while to track down a new fork, I didn't get much info from my salesman but he did take a casting number. The new fork is a way different casting, looks much stronger than the original so I assume it is a superceded part number. I noticed the hole that the shift rail slides through is quite a bit longer on the new fork, but it seemed to all fit ok.
What i chose not to replace new was the front output shaft. the teeth showed some slight damage, faint lines running parallel the length of the gear tooth on the gear face. I assume these are marks from where the tooth would catch the chain after skipping over from the previous tooth
as far as I could tell it was light surface damage only, I saw no cracking/warping/melting/signs of deeper damage