sounds odd to me... the front drive shaft does have a slip shaft on it, and bolts to a flange on the TC, so its possible that if the shaft slid back and bottomed out it would give a solid whack to the transfer case, but then break the case itself? thats a helluva whack.
youd have to have that axle slide back a substantial distance to bottom out the shaft on the driveshaft, meaning I'd be very concerned about what in the front suspension was now bent or broken and also in need of repairs. I would probably only buy a rig in this situation with an alignment report from NTB or something, and see whats out of whack that you cant possibly see with the nekked eye.
if the body is in good shape, it passes the alignment test, and youve got a spare NP208 to swap in, id say its not a big deal.
EDIT - to put it in perspective, my current M1009 is dead because I hit a jersey wall at 30-40mph at a roughly 30-45 degree angle in a snow induced slide. Crushed the bumper, brush guard, jammed the fender back so far the driver door doesn't open more than just enough for me to get in and out, and bent something in the steering enough that the steering wheel has to be turned 90 degree's to go strait... and to my knowledge, my TC is fine...
I'd ask for pictures of the break in the transfer case, and see if you can get a better idea for what may have caused it.
