I disagree that it's 'not the vent' - I have vented a number of LC transfer cases and axles to stop leaks. A weak old seal between the trans and xfer makes this worse, but the pressure in the xfer case is required to push the oil into the transmission, which sits higher in the truck. The transmission is naturally vented at the shifter, but the xfer case is not, so a vent is critical to oil staying in the xfer case where it belongs.
To fix the clogged vent and pressure situation, I pry off the steel cap of the xfer vent, and remove the spring and rubber disk, and slide a piece of 3/8" dia. fuel line on the 'stub' (what's left after you pry off the floating cap) and secure it with a hose clamp. Works like a champ. Hard to do under the truck, but not impossible.