hi ive got a 90 4matic te.my transfer case is still good so i feel very lucky.i usually shut it down during the spring summer fall by switching the test lever to "test" for a moment with the engine running and then back to "normal".this generates a fault code in the 4matic "brain and stops the hydraulic valve from actuating the transfer case.at the same time it allows the self levelling to continue working.as long as you dont disconnect the battery and reset the 4matic "brain it will continue to operate in this fault mode.i assume the tech has drained the xfer case and replaced the atf.if the front diff is locked it may indicate a mechanical fault within the case caused by the combo of hydraulic/atf.just driving with new fluid may clean up the xfer case internals and then again you may be faced with replacement.its alway good preventative maintenance to check the hydraulic fluid level on these cars everytime the hood is open.as well change xfer case atf every 12k miles.there is a very good discussion group called 4maniacs offering lots of moral support.