After a rare 7-hour drive at ~75 mph, I noticed that the transfer case is leaking gear oil and the oil is being blown all over the rear part of the undercarriage. I know a leak from the cover plate on the t-case is common, but I'm not convinced the leak is coming from there. I think the leak is coming from the seal pointed at in the picture, but I can't be sure. I've read in other threads about putting the White Shepherd oil stop leak in there, but I wanted to make sure that is the right approach in my case. I'm not even sure what that piece is called that may be leaking.

Any advice on what to do?

The aggravating part is that the truck was driven all that way so that I could replace the radiator, hoses, water pump and gasket, timing cover gasket, timing chain, crankshaft and camshaft pulleys, oil pump gasket, oil pump pickup seal, and tires. Now I seem to have 1 more issue to chase down.

 

I had the same problem on my 03 Disco. I cleaned the case with degreaser and then drove it around my nieghborhood at slow speeds so the oil would leak without blowing everywhere. I found it leaking out of the o-ring in the middle of the case. I can't remember the name of the shaft but you can see the bolt that holds it in above the fill plug. Mine was leaking in front. If this is where it is leaking you will have to drop the case out and change them. The best deal is to buy the whole gasket kit below. it is a beast of a job!

Transfer Box Gasket & Seal Kit LT230 (Part # RTC3890) - Land Rover kits from Atlantic British

 

That is one clean t case

 

you could try some White Shepard stop leak, they sell different formulas. I used the one for transfer cases about 1.5 years ago on my RRC transfer case and it worked well. might be worth a try.

 

I'm a little confused on what formula to buy. Could someone point me in the right direction?

This?
White Shepherd Rear Main Sealer (8 oz.) - BLU00234

Or This?
Buy White Shepherd Oil Stop Leak 49499 at Advance Auto Parts

Or does it not matter?

 

I believe I used this one in my transfer case
Buy White Shepherd Oil Stop Leak 49499 at Advance Auto Parts