Broken Transfer Case?

Hey folks - new forum member here. I have a 1999 4Runner - 4WD, 4cyl, automatic. I recently had it picked up to have a buddy replace a cv axle assembly. On his way, the 4WD knob went nuts, vibrated heavily - then stuck on the side of the road. Here's a photo (best I could get) from underneath. Am I looking at a broken transfer case here? Any ideas about what it'll take to fix this deal? Thanks!

 

Seems someone took a slice of your pie.

 

Yep, I'd say a broken transfer case or possibly the trans/extension housing. (hard to tell from the photo)

 

Yeah, it's a little crazy lookin' under there. It's been a good vehicle until now. I'd love to keep it going. We'll see how that works out.

 

Yeah kind of hard to tell but if I had to guess I would say a broken transfer case as well