Clicking / grinding noise when steering

[DaddyToast]

This afternoon I heard a slight clicking noise coming from the left front end while I was driving. It quickly got louder and was especially noisy when I turned left or right. At slow speeds it was a metallic grind. I'm pretty sure I didn't hear it at all when moving straight ahead, but with any kind of turn to the wheel, I did. I was near home and made it to the driveway.

The left tie rod boot is ruptured: https://drive.google.com/file/d/0ByaIOSZA-pJhSmFSNF94YmcyamNWZXg4RENUc2lRVHBteUtN/view

The tie rods were replaced about 16k miles ago (along with control arms, ball joints and sway bar links).

Could the tie rod fail so quickly? And does it sound like a bad tie rod could cause this sound?

Edited: It's a '98 Mountaineer AWD.

 

[DaddyToast]

UPDATE: Is it the transfer case?

Had it towed to the mechanic who says it's the transfer case. He's saying it'll be $1,700 and 10 business days.

He said they drained the fluid and found bits of metal in it. I guess I have to believe him.

I'm confused, though. Would a transfer case noise occur only when turning left or right but not when the vehicle is moving straight ahead?

Edited: The sound is a "KLING-KLING-KLING" coming from the left front wheel area. It's almost a scraping sound.