I should have given more info. I'm the third owner. There's been no heavy duty use. Just daily driver stuff. The odometer has 82400 miles. The rear diff was rebuilt by a local shop for the previous owner. They put bearings and seals in it only. No noise coming from it now. Both the tech at the GM dealer and the tech at my local shop (who are as good as the dealer) did not try to sell me anything. The dealer tech said he thought it was the carrier bearing. He looked in the diff with a light/camera tool and said the wear pattern on the ring and pinion looked ok. The rebuilder is the one who advised me that they have a life expectancy of about 40000/60000. They are a reputable rebuilder. All the dealer was going to do was break it apart, put new bearings and seals in it and put it back together. No ring and pinion. No one said there was anything to do to upgrade it. The local tech said he thought the transfer case might be involved, too, but after he drove it, was sure it was the diff.
So, I'm back to the same question. AWD and spend $1000 for a new diff and possibly some more if the transfer case is involved or sell it and get a conventional four wheel drive. Please give me advice. You guys are the experts and I'm not. Thanks again