Extremely common unfortunately. You have to rebuild the transmission to replace the Output shaft as it is the main shaft of the transmission. So is it difficult? You decide. Would be for me, but many around here wouldn't consider it difficult at all.
Make sure you get a cross drilled input gear to replace the worn one in the transfer case, this allows more oil to the interface, and the spline section is longer, so it distrubutes the load better. Some also swear by slightly overfilling the t-case with gearoil as well, since that is the highest point in the t-case...
There are many threads on this all over the net, and here in particular, search 'spline wear'.
Here is the Text of the Spline Wear TSB issues by Land Rover:
"Gearbox Mainshaft Spline Wear
Gearbox Mainshaft Spline Wear
LPLJ 178205 Onwards
LJ 506525 Onwards
LD 976480 Onwards
Some customers may complain of clonks and backlash in the transmission system. This may be due to gearbox/mainshaft spline wear. The clonk/backlash will be most apparent in stop/go traffic under overrun conditions or when maneuvering the vehicle during parking, etc. From transfer box numbers 28D460996 F (Discovery) and 22D 461124 F (Defender) all factory built LT230 transfer boxes have a revised design of input gear, featuring lengthened splines and cross drilled oil feed holes. This modification eliminates the
requirement for an oil feed disc (bulletin H415) and eliminates input gear/mainshaft spline fretting/wear. Coincident with this change, the transfer box identification number has been changed to Suffix "F".
The new parts supercede all old parts and should be used in ALL LT230 applications during repairs.
NOTE: Do not use in conjunction with an oil feed disc, Bulletin "H415 Mainshaft Spline Wear Prevention." If a complaint of transmission clonk/backlash is made, it is likely mainshaft spline wear has occurred. The
transfer box mainshaft input gear and gearbox mainshaft must be replaced together as a pair.
If a customer complains of transmission backlash/clonk refer to the
Mainshaft/Input Gear replacement part numbers
FTC5087 replaces FTC4188, ratio 1:1.214,28 teeth
(Defender and Discovery)
FTC3703 - Gearbox Mainshaft (Defender and Discovery)
FTC5087 replaces FTC4188, ratio 1:1.214, 28 teeth
(Defender and Discovery)
FTC5090 replaces FTC3981 - Coupling Shaft (Defender and Discovery)
Follow procedure outlined in Workshop Manual Section 37 "Manual Gearbox", Section 41 "Transfer Box", and Section 44 "Auto Gearbox."
For ZF Automatics: When coupled to a ZF Automatic gearbox a new coupling shaft is required with extended splines. This is a factory fix for all Discovery Automatics and LT230 transfer boxes.
NOTE: If the clonk/backlash is thought to be coming from the transfer box, remove the power take off cover and bearing housing from the rear of the transfer box to inspect the input gear. Visually inspect the transfer box input gear and the gearbox output shaft if visible wear is evident, the gearbox output shaft and the ransfer box input gear will need to be replaced as a pair.
Normal warranty policy and procedures apply.
37.20.88/26 - Input gear and mainshaft (manual) renew 10.50 hr.
44.20.88/26 - Input gear and coupling shaft (automatic) 7.00 hr."
Here is the Oil Thrower 'fix' TSB as well, issued before they started using the crossdrilled input gear:
"You have the oil thrower fix if there is a yellow X painted on the back of the T-case. None of the fixes can be done with an LT77s. This is the PREVIOUS fix. Mainshaft Spline Wear Prevention
Mainshaft Spline Wear Prevention
Discovery - with R380 Manual Gearboxes
AFFECTED VEHICLES:LJ 081991 to 172377
LJ 500000 to 504330
LD 939976 to 972378
To prevent occurrence of mainshaft spline wear, an oil feed disc has been introduced into the LT230 transfer gearbox which can be retro-fitted to earlier vehicles providing a customer complaint of transmission backlash/clunk is not evident This disc is a preventative measure only and will not cure existing spline wear induced "clunk" without other component changes. All transfer boxes from the above VIN numbers LJ72378, LJ 504330 and LD 972378 that are fitted with a feed disc at the factory are identified with a yellow "X" painted on the power take off cover so external confirmation of repair is visible, dealers should also apply this paint identification to identify completion of repair and to prevent this work being carried out again.
NOTE: Vehicles fitted with a LT77S manual gearbox CANNOT utilize this fix. Transfer boxes from suffix "F" will be fitted with a production solution which entails additional oilways in the transfer box input gear (detailed in Bulletin 37/02/96/US). Vehicles fitted with suffix "F" gearboxes cannot be fitted with the oil feed disc.
At the earliest opportunity fit the parts listed below to all R380 vehicles, providing no customer complaint of backlash/driveline clunk is evident.
FTC4993 - Oil feed disc (Qty. 1)
FTC4994 - "0" ring (Qty. 1)
STC611K - Hylosil sealant (Qty. 1)
NOTE: This fix cannot be fitted to LT77 or LT77S manual gearboxes.
See Workshop Manual for removal of the P.T.O. cover and bearing plate.
1. If during fitting of the oil feed disc, advanced spline wear is noted, both the gearbox mainshaft and the transfer box input gear should be replaced (if the replacement transfer gear has oil holes into the spline, an
oil feed disc will not be required, see Bulletin 37/02/96/US).
2. Assemble "0" ring onto disc and locate disc into bearing housing ensuring cut outs are aligned and disc ID "TOP" is at the top of the disc.
3. Rebuild referring to Workshop Manual, cleaning off all traces of old sealant.
4. Paint a yellow "X" on the power take off cover.
Note: Do not rebuild with grease - if spline lubrication is required, use only transfer box oil.
NOTE: For guidance on repairs to resolve customer complaints of transmission backlash refer to Technical Bulletin 37/02/96/US.
Normal warranty policy and procedures apply
H415 - Fit oil feed disc 0.90 hr.
NOTE: If any additional mainshaft wear is noted replace parts and claim
through normal procedures."