Transfer Case Making Noises

[1Bad4Runner]

My brother has an 82 Toyota and when his transfer case in under load it makes a rattling noise, I told him it might be his bearings.

He said it may also have water in it since the fluid is milky and he has never changed the oil since he has bought the truck almost 2 years ago.

Let me know what you think it is. 

[Hyena]

single t-case or dual?  dual t-cases make that noise even with new bearings.

[1Bad4Runner]

Sorry for not replying in awhile.

It is a single T-case.