Are you sure that you don't have a transfer case issue? They found that my front axle coming out of my transfer case was spinning BUT the front wheels were not turning which indicated the front axle was the issue. The total bill out the door was $873. They removed the front axle and disassembled. The right front axle spline, right sleeve drive axle and cluster splines had worn out and were spinning. They replaced the right front axle shaft, sleeve, front axle cluster and 2 axle seals. I had an extended warranty that cover some but I still ended up paying $300.00. I had a 1997 Bravada AWD that ran excellent and never had a majory issue. I ran that thing to 120,000 before getting this 2002 because I figured it would be just as good. This major repair coupled with the tranny issue has me wondering about GM products in general. However, I am thinking that this will probably be my last AWD, I would rather have the buttons to put it in 4-HI when I want to instead of waiting for the slip and fishtail until it kicks in. I just cannot figure out how that front axle got stripped out unless one of the sensors or the scroll motor on the transfer case gave the wrong signal or the tranny issue caused it. I called GM Customer service with no results and I talked to the stealership with no results. If you don't have an extended warranty good luck on getting any help with paying for it.
Good luck and let me know how you make out.