replace seals on or around transfer case

The first thing to do is to have a repair shop identify the exact source of the leak to determine the repairs necessary. Could it be engine oil leaking from valve cover gaskets or transmission fluid leaking on to the exhaust that is causing the fumes or smoke. The area will have to be washed down and if the leak is difficult to find, a dye may be needed to be put in the oil, this dye has florescent material in it that can be viewed under an ultra violet light to pinpoint the exact source of the leak and then give you an accurate estimate.