Yup, that would be my first guess. Ran without much/any gear oil for a while, and /or ran with water mixed into it. I have seen a lot of output shafts like that, some with the splines deformed so far that the gears would barely come off after breaking the first puller I used. Condolences. John
That would be an indicator of transfer case main shaft bearings that are completely out of adjustment/shot and continued to be operated. Picture the parking brake drum running in an exaggerated circle, rubbing on the parking brake backing plate.
This is far from a shocking discovery considering the many other issues that have been uncovered on this customer vehicle. Front output flange nut reused and not staked, rear output nut reused and not staked, body not even secured to the frame, partial de-smog but nothing really capped off or sealed. It was purchased from a company that focuses on Vintage vehicles primarily for the Off Road enthusiast.
What was the cause?
Looks to me like lack of lube or not the right lube, or maybe it had Lucas oil in it?
The output shaft is re-useable IMHO however a good weld job and re cut the splines with a small disc grinder and a couple of files, works. Have one I just pulled apart with the output shaft splines more than half worn through and the gear splines even worse, wear begets wear. The blackness on the parts says heat to me and lack of lube.
So do you rebuild it or find a replacement?