Transfer using oil & noises?

Hi all & Thanks in advance for any direction/input. My son's 2001 Chevy Suburban (8.1 V8 4Wh. Dr. 3/4ton) had a noise coming from the transfer case.
After checking for fluid...it was dry. he filled it & it went quiet & worked fine. It went dry again (500mi.) & he found out it was losing the lube through the overflow vent? He bought it used, 2yrs ago 38,000mi. ran & worked fine until last week. It has 70,000mi now & not been abused or even towed anything. The dealers just say bring it in & it may cost $3000 to repair? Anyone heard of this type of problem & what causes it? Any repair tricks that can be tried? Thanks again, Steve
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Steve77265
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