I would have an independent assessment.
We took my wife's ML320 to the dealer for its first service to see how their service was. They kept the car for four days and found over a thousand dollars worth of warrantee work (that we knew nothing about) but they didn't say a word about the transfer case oil leak.
I wager the tech working on it wouldn't get paid well for the leak repair. I'm watching it and we have plenty of warrantee left. The point is that the techs get paid poorly on many warrantee repairs, which clouds their judgement. Get an opinion from someone who won't be fixing it.
Owner 24 bay BSC
Bosch Master, ASE master L1
26 years MB technician
[This message has been edited by stevebfl (edited 06-11-2000).]