Only way the size of tires could cause this failure is if it was in part time 4wd.
How many miles? Sounds like it may have been a stretched chain and it was finally fatigued enough that it jump and caused the damage. 242's are also known for just randomly grenading when they get up there in miles. Put a new case in and you should be golden.
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1993 Jeep ZJ
1983 Camaro Z28
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