The major cause of broken Transfer Case castings is accidents. A good front end hit can push the driveshaft backwards breaking one or both case halves. Other common causes are running the transfer case out of oil, rock hits/high centering, excessive driveshaft angles (from Lift kits), and operating a case with a badly worn chain.
No gasket is used between the rear extension housing and case half. Both mating surfaces must be cleaned down to bare metal before assembly using alcohol or brake cleaner and letting residue dry. Apply 1/8" bead of QU90005 or QU90006 RTV Sealant. For best results, let RTV cure for 24 hours before adding oil.