So I just inherited this 02 discovery (along with its payments) but it turns out almost the entire drivetrain is messed up. The transmission, transfer case, and propeller shaft.
I just pulled the propeller shaft and while I was under there I found that the transmission and transfer case are covered in about a quarter inch of sludge.
Has anyone else dealt with this before. And if so what was the cause of it?

 

I'm sorry to have to tell you this but you have no idea what you "inherited". Search the forums for prop shaft destruction. This is the number one fault w/ these trucks. The passenger side catalytic converter bakes the grease out of the u-joints and eventually the joint snaps as you're trucking down the road. When it snaps it puts a 5,000.00 hole in the tranny. Sounds like your T-case might be damaged as well.

Good news is (if your tranny does have a hole in the case) they are very durable so the ones you find at a boneyard are worth replacing with.

 

Luckily I pulled it before it did any damage. So no holes or dents anywhere. I ordered a new one since this one was torn to shreds. But my current issue is the amount of caked on gunk. Where did it come from?

 

Go buy a lottery ticket. Sounds like you dodged a bullet.

The sludge could be from a number of things. Leaky oil seal (front timing cover, valve cover, rear main seal, ...).

I would spray it down w/ degreaser and pressure wash off the sludge and monitor it for leaks. Best way to hunt down leaky seals.

 

Yeah. And I was so close to driving down the highway. I already started cleaning out the underside and figured out that it doesnt apear to be coming from the engine

 

Wow. As coors mentioned, you really dodged a bullet. Usually when the prop shaft goes, it takes the tranny with it. Was the prop shaft busted like that when you took out?

 

Yeah. Thats what I crawled under to see. I guess ill prop it up to devine intervention. Lol

 

Was it vibrating like crazy when driving with the prop shaft like that?

 

I've recently discovered a leaky power steering pump that has created quite a mess before finally failing. So that's another possible culprit for your leak.

Rovers leak a lot, though. There's an old joke that the only time a rover doesn't leak is when it's dry.

 

That's not a leak, that's Land Rover's sophisticated Undercarriage Automatic Anti-Corrosion System (tm).

Just kidding... yeah, they tend to leak like that. Might as well get used to it. Unless the fluids are just pouring out, it's usually easiest to simply keep an eye on them and top off as necessary.