Yeah, Ford has really confused the issue on this topic, no doubt. Redford, thanks for confirming.
Just talking about Motorcraft products, I think there's a consensus on the following points (but correct me if I'm wrong):
- The Gen3 (e.g., my 2002) manual says to use "Mercon" (no suffix) for the transfer case fluid;
- FORD no longer sells Mercon;
- The Gen4 Explorer manual (at least for my 2010) says to use "Ford Transfer Case Fluid / XL-12" for the transfer case;
- XL-12 is not currently sold BY FORD. (Of course, others, including some dealerships, might still have old stock, but I don't personally know of one.);
- Nobody has found a Ford web page or document that says its okay to put Mercon V in the Gen3 or Gen4 transfer cases;
- Fordtechmakuloco says not to put Mercon V in these Explorer transfer cases: ;
- All the Mercon V published information pages say not to put it in transfer cases, including: MERCON® V Automatic Transmission and Power Steering Fluid
Again, please correct if any of the above is wrong. In addition, it is undisputed that there is conflicting published statements about Mercon LV (both that it is/is not appropriate for transfer cases, without specifying which transfer cases). IIRC, the page that says not to use LV in transfer cases also lists XL-12 (aka "Ford Transfer Case Fluid") for that purpose, which is the clue that its an outdated page (since XL-12 no longer is sold by Ford).
In addition to the above, CDW -- whose advice has been wonderful over the years, and I have frequently followed -- says its okay to put Mercon V in transfer cases. He says that the Mercon V formula was changed at some point. Insofar as I am aware, I've not seen any documentation supporting this advise (but again, please point to it if I missed it). Finally, I've reported that my dealership parts guy says that XL-12 has been "obsoleted" and that the official Ford substitute is Mercon LV (which seems to back up the published page that says LV is good for transfer cases).
I've also reported that my local Ford dealer will sell me Mercon LV @ approx. $6/quart.
Others (including CDW) have spoken about non-Ford products, including Valvoline. I checked Valvoline's website, and they sell only one "transfer case fluid", which you can buy on Amazon for about $36 for 6 quarts:
https://www.amazon.com/gp/product/B...42e-e8f213ef368b&pf_rd_r=SGXMYJ0KPYEKDQ4JBQB8 . This Valvoline product says its XL-12 compatible. (If Valvoline thought that their cheaper DextronIII/Mercon-compatible ATF already filled the bill, not sure why they developed this product.)
My own feeling is that, while CDW may well be right (he usually is), I don't feel comfortable using a third-party ATF that says its "Mercon" compatible for the transfer case. My guess is that they're talking about ATF only--as in, we met the minimum Ford spec for Mercon ATF use in ATF's, and then added all these other goodies to meet other manufacturer's specs for their ATF's). Its pretty clear that, at least in some circumstances, Ford's specs identify a difference between the trans fluid and the transfer case fluid (as is the case in both the Gen3 and Gen4 manuals). But if I were going to risk it, I'd pick "Mercon" compatible over Mercon V (or Mercon V compatible)--because clearly Ford is telling us consistently not to use Mercon V in transfer cases. As is Fordtechmakuloco. Sorry CDW. I have not researched Amsoil (too spendy for my blood.)
I wouldn't hesitate to use the Valvoline product linked above, or Ford XL-12 if I could find it at a good price. But since I don't need 6 quarts of this stuff any time soon, I'm just going to buy the Mercon LV from my local dealer when I drain and fill my Gen4 transfer case in the next couple of weeks. I don't mind paying $6 a quart for the real deal. Drew.