I really hope you are right about the IWE hubs, as that seems to be a much quicker fix by the dealer. The only problem with that is that apparently, if i switch to 4WD, it wont make the noise, but it still does for me (Unless its maybe "partially" engaging???).
Yes, I am a Ford Certified Technician. How long as the noise been occurring for? If its been ongoing for a while, it is entirely possible to damage an IWE to the point that it no longer engages (as smurfslayer mentioned). Generally that will result in a pull to one side under acceleration, unless both are failing to engage, at which point you effectively have no power transfer to the front wheels. An exhaust leak from a cracked manifold or loose flange bolt is also possible, just need the dealer to do their job and properly diagnose it.