First rule: Know your enemy.
The dealer does not warranty anything. FCA warranties your jeep. The dealer is independently owned and licensed by FCA to sell and service its products. Most likely the dealer is doing a cost vs benefit analysis here. If they tell you it is covered, do the work and FCA refuses the warranty claim, they are out the money. So if they think there is a 20% chance FCA will not pay the claim, that may be a risk they are simply not willing to take.
Add to that that the dealer makes more money from a cash repair than from a warranty repair. You can bet money that if you tell the dealer to go ahead and repair it outside of warranty, they are going to make a higher profit margin than if they do it under warranty. (They most likely pay their techs differently for warranty work (less) than for cash repairs (more), but that is getting too deep in the weeds.)
What you need to do is get past the dealer and go directly to FCA. Call the customer service number for FCA and start a dialog with them. Ask the dealer to put you in touch with the FCA zone representative for FCA. They will probably balk at giving you his or her contact information, but who knows. When I have been able to get to the manufacturer zone rep, I have had incredible success in getting things resolved. The zone reps are in that job because they know how to get things resolved. Its what they do all day long.
Its always nice when the dealer has your back. Doesn't sound like that is the case here (color me surprised). So you need to get proactive and go around the dealer. Or just pony up for the repairs out of your own pocket.
^^^^^^What He Said ^^^^^^^^
The dealers are not your friend when they see dollar signs .
Most, not all dealers have that mindset , but unfortunately most generally do .
FCA will try to protect the dealers assessment , until they don't have any stable ground to stand on .
There have been other instances of transfer cases self destructing due to vibrations caused by excessive lift elevations compounded by improper pinion angles .
If you could would you provide more information about your Jeep in regard to modifications if any , and what you noticed by the way of your days previous wheeling trip that may have something to do with the failure .
Did you damage your front driveshaft ? By dragging it across anything , we just need more information to be able to help .
Regardless of what you may have done yourself , most of these failures are a bound up drive train or a vibration issue .
Where are you located , and which dealer are you talking about ?
I'm certain that someone here can guide you to a dealer near you that may be willing to help .