Originally Posted by GDR
Just taking a wild guess by looking at assembly drawings. One of the retaining bolts came loose from the rear bearing and got shot or forced into the case by the transfer gear.Take a look in that hole and see if that's where the gear is.
Its still possible something hit it from the outside but from the shape of the hole fracture and location I highly doubt this. Either way you still need to pull the tail housing off to get it welded correctly.
I wouldn't keep driving the car even if things sound ok. You are still loosing oil. Problems from low oil don't show up right away.
Thanks, I'm gonna try and get a closer look and see tomorrow. I'm definitely not driving it till this gets sorted out.