Hello, couple of questions on my 04 XL transfer case, 107,000 miles new to me, as I took out plug to check level air was sucking in around the threads like the case was sealed air tight, is there a vent that is plugged or is it sealed tight?
Next thing was that the fluid was muddy brown, smelled like atf but looked crappy brown. Didn't look foamy like water, I guess it's troubling if it's heat related, I'll put clean fluid in and see what happens.

 

Most of them take ATF. If yours does, try Valvoline Max Life Dex/Merc. Best ATF out there. When I had a Jeep Cherokee, I changed the transfer case ATF after a couple of years and it was pretty dark. Subsequent changes were much better. And it doesn't matter if you ever use 4WD or not - it still gets used up.

 

It has a vent so you may want to check that it's not plugged. I change mine every 30k and even then it has looked pretty bad when I changed it. I just used Mercon V.