Three problems related to transfer case have been reported for the 1999 Mitsubishi Eclipse. The most recently reported issues are listed below.
Driving on the NJ turnpike, noticed speed decreasing on its own. While moving over to the emergency lane, the rear wheels locked up.
Consumer states he had to replace the transfer case on his 1999 Mitsubishi Eclipse. The tail shaft seal leaked, there was a recall for different model years NHTSA 98v069000. When the consumer took the transfer case down, there was a bunch of shavings and no fluid left. The transfer case locked up and that is why he took that down. When he took the vehicle to the dealership, they told him it was not covered under that recall. The consumer was driving in his neighborhood when the vehicle locked up.
All dsm awd models from 1990 to 1998 have had this transfer case problem and subsequent recall. Upon inspection by a local aamco shop, it was determined that there was very little, if any, lubricant in the transfer case (assumably a leak). This severely damaged the transmission, and they're asking ~$2600 to rebuilt transmission and transfer case.