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The output shaft seal is an essential mechanical part of the transfer case Its main job is to connect your transfer case to the vehicle's axles So transfer case does the hard work of shifting from one drive mode to other car modes for you. The most common reason for a transfer case leak is a bad output shaft seal These are round seals that prevent fluid from leaking out of the holes in the transfer case where the drive shafts exit Time and age will cause your output shaft seals to wear out and leak In most 4 wheel drive cars, the rear wheels are typically engaged all the time and the front wheels spin only when needed Well, i've determined there is a leak in my transfer case for my 2003 chevy silverado z71 4x4 I filled up the transfer case with fresh fluid, and it proceeded to leak out fluid overnight producing a puddle about the size of a coffee cup lid I then cleaned off the case, but now it only leaks. Another sign of transfer case issues involves obvious leakage found beneath the casing itself Any transfer case fluid loss is cause for concern However, the more prevalent a leak of this nature is, the more it should serve as an immediate cause for concern Significant leakage could even indicate a cracked or fractured transfer case housing I gotta 2002 1500 4x4 with a np8 transfer case The transfer case out put shaft yoke is leaking oil Leak does not appear to be coming from between seal. A transfer case leaking oil or a transfer case leaking transmission fluid would cause the components to rub against each other, resulting in wear and tear The gasket is a sealant. Just like the transmission, it relies on transmission fluid to lubricate its gears and bearings, ensuring smooth operation When a transfer case experiences a fluid leak, it can lead to serious problems, including damage to the transfer case itself. The transfer case seals to transfer case input, and the transmission rear housing seals via an o ring to the transfer case housing I did notice a small gear oil/grease type drip on the output seal but it definitely was not transfer case fluid I believe it was likely from reinserting the driveshaft into the transfer case. Like any problem, leaks don't go away when you ignore them Learn everything you need to know about a transfer case leak with this helpful guide.