VEHICLE WAS TRAVELING IN THE SNOW IN 4 WHEEL DRIVE MODE WHEN IT STARTED SHAKING AND VIBRATING AS IF IT HAD A FLAT TIRE. BECAUSE OF THE ROAD CONDITIONS VEHICLE WAS TRAVELING UNDER THE SPEED LIMIT. FAILURE WAS CATASTROPHIC AND DID NOT ALLOWED THE VEHICLE TO COAST TOO LONG AS THE VEHICLE JAMMED, AS IF THE TRANSMISSION HAD BROKEN SEVERAL GEARS AND BINDED. VEHICLE CAME TO A STOP ENGULFED IN SMOKE AND FLAMES WERE COMING FROM THE UNDERCARRIAGE. UPON A QUICK INSPECTION IT WAS NOTED THAT THE FRONT SHAFT HAD BROKEN OFF FROM THE TRANSFER CASE, OIL WAS POURING OUT OF THE CASE AND HEAT FROM THE EXHAUST PIPE, IMMEDIATELY NEXT TO IT, HAD IGNITED THE OIL INTO FLAMES. MUD AND SNOW WAS USED TO PUT OUT THE FLAMES. UNDER FURTHER INVESTIGATION IT WAS NOTICED THAT ONE OF THE TIRES HAD A BLOW OUT, THE REAR DRIVER TIRE. AFTER REPLACING THE FLAT TIRE WITH THE SPARE, AN ATTEMPT TO CARRY ON 2 WHEEL DRIVE MODE WAS MADE BUT RESULTED IN IMMEDIATE RESTART OF THE FLAMES. FLAMES WERE PUT OUT AGAIN USING SAME METHOD AS BEFORE AND VEHICLE WAS TOWED TO A TOYOTA DEALERSHIP. DEALERSHIP UPON CURSORY EVALUATION DECIDED THAT THE TRANSFER CASE HAD "INSUFFICIENT" LUBRICANT. THIS IS RIDICULOUS AS THE TRANSFER CASE LOST ITS OIL WHEN THE SHAFT POPPED OUT WITH THE FRONT PINION GEAR CAUSING THE FIRE. THERE IS NO HEAT SHIELD TO PROTECT OIL FROM IGNITING IN THESE VEHICLES. VEHICLE HAS NOT EVEN BEEN TAKEN APART AS TOYOTA IS NOT AUTHORIZING THE WARRANTY REPAIR. ALL PARTS ARE AVAILABLE FOR REVIEW. *TR