Ouch, seems as if you're not in the best location for LR diagnostic services - I'd drive to more well-known shops, sounds like it'll be worth the $$!.

At this rate you can get the thing re-titled as a 2012!

 

too bad about your transfer box. i have seen it a few times.
land rover released the out put bearings for transfer box.
i have replaced a few of them. about $500 in parts and 6-8hrs of labor.
ask them to rebuild it for you.

 

Sorry to hear about your misfortune i have been on the wrong end of expensive out of warranty repairs. But i do have a question: is this a fairly common problem with LR3s?

Can this this be prevented by changing diff lube more frequently?

Or using a different diff lube?

I'm currently about to pull the trigger on a LR3 and am trying to figure out how to orevet this type of thing from occurring.

Thanks