Maybe its from that ship-load of Beemers that went aground off Cornwall a few years back .
I help members of "Toyota Landcruiser Clubs" by repairing gearboxes & Transfer Boxes (and other things). A local member brought his truck over to me saying that the Transfer Box wasn't working properly . . .
I drained this out of it:
I then removed the box and stripped it down :
This is what happens when you go wading in streams in the Pentland Hills when the front output shaft oil seal has 'gone' .
A full set of bearings, springs, seals and a new 'Hi-Vo' chain cost £1,200!
I guess something similar happened to that oilhead.
I spent a few years wading in streams in the Pentland hills too, a few years back,tickling brown trout, and the inside of my knee caps probably look like that transfer case.