So I went to drain/refill my transfer case on my 02 screw 4x4 and about 5 or 6 quarts gushed out. Now I know that its only supposed to be filled with 2 quarts so Im guessing it has leaked from the tranny. I did however have the front jacked up to help the fluid come out. My questions are

1. By me jacking the front end could that be why more came out somehow?
I dont think it would, but just wanted to see what you guys thought
about it.

2. If it is a bad seal, is there really a problem running it like that because it
uses the same fluid as the tranny? (as long as the tranny is kept at
proper level with clean fluid).

I put two quarts back in and drove it a few miles, checked for leaks, checked my tranny fluid and it was at the perfect level. I noticed it fixed the slight shudder I had going into overdrive and my tranny response was way better.....hmmm this is wierd.....I will monitor my tranny level over the next few weeks to see if its goes down at all.....

 

Check the breathers on both the trans and transfer case, if one is clogged it can do this. I hade a Toyota 4WD (the very first ones) and that same thing happened to me, I burnt the trans. I don't think the fluid should go back and forth between the two b/c each one has it's own oil level.

 

It's a bad seal between the TC and tranny.

 

I let it sit overnight and drove it about 10 miles....the tranny level is still at max line.