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I still have the movement of the output flange. It seems to be a non-issue so far. Its still seams to have too much play but it hasn't gotten worse nor has it caused a problem I've addressed a few issues since than that has helped. We have very bad roads here in Pennsylvania due to the constant freeze thaw during our winter. This has been very hard on wheels tires and bushings and such. I can't say that one thing has solved the problem but collectively they seem to have done so. We are all aware of the front end needing to be refreshed. My solution is Powerflex control arm bushing. Lamforder (SP?) control arms and balljoints. I had been overlooking the rear. I replaced the rear outer control arm bushings and also replaced some out of round wheels and put on some new tires. Also checked fluid levels in front and rear differential and the transfer case.
The car is driving very nice now and no unsettling noises.
I've read with much interest your message from 2012 about a movement in the front output flange of your 330xi transfer case. I'm experiencing the same issue with a 330XD in Europe, and the same rumble / vibration noise.
Did you fix your issue ? What was the problem ? Bearing ? Splines ? Gears ? Has the vibration noise disappeared ?