I got the van fixed yesterday and am happy that it went so well. The conversion company gave me excellent customer service with this. They made all the arrangements to get the transfer case replaced. Yes, you read that correct "REPLACED"!
The T/C was a re-built one from a 1987-97 Ford Bronco, F150 or F250 (Transfer Case ID BW1356F). It was rebuilt by a company called King-O-Matic in Delta, BC. They just sent a replacement with no questions asked. As for the exact issue with the T/C, I don't know. They wanted the damaged T/C sent back with the oil still in it. I am assuming that is so they can figure out what happened to it as it is not a common problem and so they can prevent it in the future.
Cheers
Darryl