Two problems related to transfer case have been reported for the 2002 Chevrolet Avalanche. The most recently reported issues are listed below.
Transfer case fluid leaking from a hole in the case caused by internal pump rub. All the transfer case oil expelled onto the hot exhaust causing smoke and possibly a fire.
I had my Chevrolet available to the dealer three times to find oil spraying up on the drivers door they found a crack in the front differ. Said they put in some go in the crack and it doesnt need replaced. In my opion the casting in chevy avalnches are deffective and need replaced.