I’d rather have it be the transfer case than the diff. I hate setting up differentials. It’s time consuming and tedious. I’m always second guessing myself although I’ve only ever had one fail after gear swap and that was on drag car but in that instance the plug welds broke too and the center section turned straight up, ripped the driveshaft in 3 pieces shot out the back, broke the yoke off the diff and split transmission case right up the middle. All happened coming out of burnout box when I let off the line lock.
Transfer case is a fairly easy rebuild. Hardest part is taking it out but then again, you only have one driveshaft to contend with. Lol. Hope it’s an easy fix for ya either way. If this stuff was easy and cheap, everyone would be doing it.