CX9 Transfer case clunking - assume trans splines are toast?

I just took my CX9 in to a dealer for the control arm/airbag recall. While there I had a front CV exle replaced, engine service, differential fluid change etc. On the way home I had a major hum that I misdiagnosed as tire noise. My wife was driving a few days later and the car comes to a shuddering halt while going 55 in traffic. I got it home and got it in the air and here's what it sounds like when I put it in drive:

https://youtu.be/TzBesEDzIUQ

I'm not a pro but assume that sound is bad. Very bad. It seems certain its the transfer case, which is a common problem and will cost ~2k to replace. My question is whether I should assume the splines on the transmission are toast and so will cost much more. For $2K I might go for a repair, but $4k+ would not be worth it. Any opinions?

Thanks!

It might be the transfer case. Ask yourself this? you just spent about 1k on the services you listed above the axle replacement is not cheap and the engine service I am assuming is a spark plug change which is not cheap either. How many miles do you have on the vehicle. I have seen people spend about 2k to get their car fixed and they have close to 200k miles. Their logic is that it is cheaper to do this than buy a new car and it can buy them 2-3 years so that they can save up for the new or newer vehicle. This only you can answer if it is worth it or not.

It's a tough choice! I've got 160k miles on the vehicle and it's paid off. Until now we've loved the CX9 but this really seems like a major design flaw.

Having watched a few youtubes about what it takes to replace the transfer case, it looks like one of those jobs that would take me forever and then it wouldn't be right when I was done. Anyone done one of these while laying on your back?

Here's another video: https://youtu.be/MZKaSOtybDk

if the splines were completly sheared the rear wheels would not turn.

if it is just catching on and off, you will know soon as they will shear completly if you drive it. If it is only in the transfer case, then you might be good and be able to install a new one if the splines of the transmission are not sheared. There is no other way of telling other than taking it off.

I took mine off, splines on the tansmission were dead and never put the TC back in.

it is hard to diagnose a problem with a sound though. When mine went dead, it made a loud bang and then i was out of awd. TC still works but splines are toast.