A few things to consider:
change the transfer case fluid
Change and flush the transfer case fluid immediately.
No, it will destroy it.
While the Jeep is moving 50mph or less, press the transfer case shift lever all the way forward/down into 2WD. The transfer case should release it by the time you slow to a stop - sometimes half a mile or so. If it doesn't, the transfer unit may need fluid, a fluid change, or adjustment. There could also be a similar problem with the front differential (axle drive gears).
When refering to "service" I assume you mean fluid change and/or check. I check my fluid every oil change and change my fluid twice a year. Granted i use mine very hard offroad. I also prefer running synthetic fluid, but check with a dealership and make sure yours doesn't take a special lubricant.
Generally every 30000 miles unless you have synthetic fluid, and the transfer case as well.
Be more specific, Are you talking about the transfer case, transmission, or front differential?
According to the 1998 Ford Explorer owners manual : ( Motorcraft MERCON automatic transmission fluid ) The all wheel drive transfer case takes 1.3 quarts
Motorcraft MERCON automatic transmission fluid in your 4x4 transfer case
The fluid level ( MERCON ATF ) should be at the bottom of the FILL hole when you pull the FILLER plug on your transfer case
Yes, power steering fluid is very harmful to an automatic transmission. You should not drive it until the fluid is changed.Yes, power steering fluid is very harmful to an automatic transmission. You should not drive it until the fluid is changed.
No, you WILL lose fluid out of the rear tailshaft extension of the transfer case. If you MUST drive without one, stuff a rag in the tailshaft extension and check the transfer case fluid after you re-install a shaft.