Yeah that waterfall/stream was fairly unusual.
Main issue with the center diff low range is I used helical planetaries out of an automatic. Thought it would be cheaper and easier but since we're modifying the gears we are using and remaking some of the other ones, it'd probably be just as cheap to make them straight cut from scratch. I think most of the wear we're seeing is because the helical cut produces some thrust loads on various parts. Biggest issue is the ring gear for the actual differential part is held into the lock or unlock position only by the shift fork. It occasionally locks itself. I originally made the forks out of bronze. Pretty sure the noise was the fork being worn enough that it was barely keeping the ring gear in the unlock position. I'd made some steel forks in the meantime so we swapped one of those in this time. Noise went away, or is at least very faint now, everything else seems good.