Q: Can failure of a transfer case cause damage to a differential?

Hi there. Based on the mileage of your vehicle, its possible that the seal could have gone out on its own. A dynamic seal (seal on a shaft) will last for up to 80,000 miles on normal conditions, however, this depends on the engine load and where the vehicle is driven. Dirt and contamination can cause the seal to prematurely fail and causing the oil to leak out of the differential. First check the differential oil level. If there is no oil, then the seal was leaking and leaked out all of the oil. If the level is full or slightly low but within range, then the differential could have failed from either overloading the gears or causing an over-speeding condition and then an instant stop (usually when off-road). Its possible for the transfer case to fail and make the differential have a jolt to break a gear, but its more common to have the oil leak out or the gears to over-spin. If you need further assistance with replacing a damaged differential, then seek out a professional, such as one from Your Mechanic, to help you.

Hello. There may be instances where the transfer case can cause issues with the rear end, as the two are connected via a driveshaft. If the transfer case fails in manner that causes a sudden impact or jolt to the drive train, it is very possible that the differential or rear end could sustain damage, as it is mechanically connected directly to it. In most cases this sort of issue would cause a problem with the ring gear or pinion, not so much with the seal. Usually a problem a the seal will result in a noticeable leak, which can result in damage to the differential, but only if the differential fluid runs low. In most cases an axle seal is simple to replace, however that can vary across makes and models. I would consult the shop and have them specify to you what the specific issues are, and explain to you why the differential needs to be replaced.