The only thing is that you may get fluid coming out the back. The governor is on the outputshaft and does get fluid pumped through it.Would it harm anything if I cranked It up and put it in drive/reverse with out transfer case to see if the tranny actually makes a grinding sound?
As far as cranking it up without the transfercase attached, I'd use 2 people and DON'T PUT IT BACK INTO PARK until the motor is off and the output shaft stops spinning. Otherwise you'll get a grinding from the park pawl and could possibly break it.
Going to be honest, I've never rebuilt a transfercase in my 28 years of owning these. I've always thrown in a spare unit to replace the worn one. Someone here I'm sure will look at the picks and provide great feedback. But I will say that it does look like it overheated.Also I don’t know what I’m looking at/for in my T-case. I see that the top of the planetary gear box looks broke(plastic piece) but I’m not sure what went there from the start.but it did get to hot as the thrush washer on top was brown/purple/blue (that torches look) All the splines look fine to me. I’m going to get a rebuild kit but I know I need other parts just not sure what they are.. please help