Shelley , It is not possible and this why . You have the transmission , the adapter & then the transfer case . All the adapter does is provide a housing for the longer output shaft of the trans , A 4WD vehicle has a longer output shaft in order to connect with the transfer case . The output shaft of the trans has a seal & it can leak . If it leaks there is a small drain hole in the adapter that lets the leaking fluid out so you notice it has a leak & can repair it . There is no physical way on earth that the trans fluid leaked out of your trans & filled the transfer case , it would have had to leak horizontally & defy gravity . Plus the transfer case couldnt hold all the fluid in the trans , the trans holds almost 5 qts , the transfer case holds 3 or 4 qts when its full . You would of had a seroius mess of trans fluid if the transfer case was that full . What I suspect has happened is the drain hole in the adapter was clogged , the output shaft on the trans leaked , all the fluid ended up in the adapter . The mechanic you spoke to should have pointed out to you that there is a difference between the transfer case & the adapter .