DEFINITION: An occasional drop of lubricant leaking from the splined yoke is normal and requires no attention.

The slip yoke barrel is burred, nicked, corroded, or worn.

1. Inspect the slip yoke for burrs.

Minor burrs can be removed by careful use of crocus cloth or fine stone honing.

2. If the is badly burred, corroded or worn, replace the yoke.
3. Replace the oil seal. Refer to one of the following:

•	Rear Output Shaft Seal Replacement in Transfer Case

•	Extension Housing Rear Oil Seal in Automatic Transmission

There is a faulty transmission or transfer case output shaft oil seal.

Replace the oil seal. Refer to one of the following: