i was driving down the highway when the car stuttered and started smoking. when i slowed down to pull off the road the smoking stopped, so since the gauges looked good i speeded back up and the smoking started again. when i came to a stop i noticed that it was coming from the transfer case/transmission area. i decided to try to pull out and make it to the next exit, but the car was very difficult to get moving again. is this possibly a bad center differential or the transfer case, i need to know what to look for before i start taking things apart.

When my transfer case let go, I created a smoke screen a la spyhunter on the highway before stopping. When you made the stop, did you check if you were leaking any fluids? Did you continue driving back home or get a tow? Check the xfer case fluid level would be a start.

transfer case is what i'm thinking, since the noise it made was coming from under the car and the center differential is on the side of the car. how did it feel when the x case went, was the car difficult to get going, did the engine just rev in low gears like a badly slipping clutch.

as the fluid leaks out, the transfer case gets stiffer to turn until eventually it locks.