4WD issues (again )

Hey there. Had some issues getting out of 4 High a few weeks back, ended up getting it out with ease after some tips from here. Just around a week after that, I took a trip up a light trail and my 4HI/Low worked perfect, shifted straight in and out. Today, I shifted into 4 going around 25 mph before I went into a snowy area a few streets ahead. Truck did not shift into 4HI, but VSC turned off and the light just stayed blinking. I know I was for sure still in 2 because I was spinning the rear tires shortly after in some snow. Ended up stopping after a few mins, but when I went to attempt to use it a couple hours later when I had time to check if it would work (better conditions for shifting in/out) it did the same and now won’t turn off. Took some pics of what I saw when I crawled under-

 

Looks like maybe the transfer case output seal is leaking.
But I don’t think that is what causing it to not engage 4WD.

You likely need to diagnose the flashing lights.
https://www.tacomaworld.com/threads/4wd-system-operation-help-thread.742420/