Torque, H.P., yes......
Guys! The question was IF a given transfer case could handle the output of a 302 V-8.
A given engine, 302 in this case, can produce a maximum torque output at some given rpm. It also produces some maximum horsepower output, at some given rpm.
A given amount of torque may be applied to a mechanism at ANY rotational speed, including ZERO rpm. That is why power transmitting mechanisms are designated as "rated at such & such a torque value".
Horsepower, on the other hand, being transmitted by the shaft of a mechanism which is standing still, not rotating, is ZERO, since horsepower is a function of torque and rpm; if rpm=0, horsepower transmitted is zero.
Right? The transfer case may reliably (say for it's expected life duration) transmit a certain maximum horsepower, or torque value, but the means of "absorbing" that engine output level, tires, gears, shafts, clutch, etc., have NOTHING to do with the life expectancy of the transfer case. EXCEPT, in the case of non-continuous power transmission levels, such as shock-loads by clutches, intermittent loading due to wheel spin, wheel hop, and the like. Such loads can impose disastrously HIGH stresses on that transfer case, like a hammer peening metal, and mushing it all around.
If I'm full of **** here, please tell me so, but prove it in some way.

imp