Mercedes C Klasse Diesel Transfer Case Limp Mode

I saw similar symptoms in an older BMW X5 after an ABS module failure. The system defaults to 'limp home' mode to protect the transfer case. Have you checked the ABS module for stored fault codes? Often, transfer case issues are flagged as secondary.

Yes, the ABS module scan revealed several implausibility errors, mainly wheel speed sensor related. These appear intermittent. Were your BMW's ABS faults persistent, or did they come and go?

The BMW had intermittent ABS faults at first, which became persistent before the transfer case symptoms showed up. With your intermittent wheel speed sensor errors, I'd suggest a full diagnostic assessment by a good workshop to avoid further damage.

A workshop confirmed the ABS module as the cause, triggering transfer case limp mode. Fixing the ABS system fixed the gear selector and transfer case issues. The cost was 0€, covered by a previous warranty.