I have a 2003 chevy 1500 4x4 that has been getting small cracks in the transfer case that cause an oil leak. This truck is not ran off road and does not have any lift kits. Most of the time it is driven like a car. Is this a GM warranty problem?

Well unless you have have an extended warranty warranty that covers entire drivetrain than I doubt its a warranty problem. However if you were refering to a factory recall and free dealer replacement they are generally used to fix serious safety issues which possess a threat of serious personal injury or death while operating that specific make/model/series of vehicle. You can check the tsb's (technical service bulletins) for your vehicle and sometimes there will be a new part or service that can be used to fix that problem but you would need to pay for that part and/or labor if you have the dealer correct it.