Thanks for all the info in this thread!
Wish I had found it before I had an independent transmission shop replace the transfer case and the front drive shaft.
I have a 2001 4.4i with 155K. Stopped at a traffic light and when it turned green, there was a horrendous grinding sound and and the X5 rolled backwards while still in drive. No warning sounds, no warning lights, or any kind of warning whatsoever. X5 was driving normally before failure.
I don't know if there is any way you can do preventive maintenance on this, but it does leave you stranded without any warning.
Thanks for the website below. Great prices!
Transfer Case Express, Inc. · New, rebuilt transfer cases ( transfercase ). Lowest prices. In California, world-wide delivery