One problem related to transfer case has been reported for the 2002 Subaru Outback. The most recently reported issues are listed below.
The contact owns a 2002 Subaru Outback. While driving 65 mph, the contact heard a grinding sound coming from outside the vehicle. A local mechanic stated that the bearings in the transfer case failed. The vehicle was diagnosed by the mechanic; however, the failure recurred three months later. The vehicle has not been diagnosed by the dealer. The VIN was unknown. The current mileage was 60,000 and failure mileage was 55,000.