In my 97 f350 I still have my E40D.. I recently had a leak out of the front flywheel cover thing near the oil pan.
I was told it was the front seal. We replaced the front and rear seal and trans filter and everything... and in the trans pan it looked good..not any big chips on the magnet.
Got it back in on Friday and drove it around a bit this past weekend. It shifted great, Better actually than before (trans filter was pretty nasty).

Everytime I parked Id get out and check under it before shuttin er down. There wasn't like a drip or anything out of the cover at idle while parked. I cant really check during driving...

But then Id come out later (say overnight or a good 6 hours)and theres a decent size puddle. a good 5" diameter amount of puddle or drips around it.
WHAT IS WRONG!?
I am kinda frightened because one mechanic said maybe the trans has a crack in it...but the leaking is all near that front flywheel out of the inspection cover.

 

My 1997 kinda did that then all of a sudden one day at a light it puked its guts out, not sure what the problem was, since i put a ZF5 in right after

 

How did the torque converter hub surface look? Was it perfectly smooth? How about the bushing the torque converter hub rides in? If it is worn the seal won't hold.

 

Every one I saw that leaked out the front seal had a trashed pump in it. Kinda surprising someone would go through the trouble of doing a seal and not do the pump. Stupid mechanics you should be saying!

 

I replaced the front seal in mine 40K ago and knock on wood it's still fine. The torque converter bore looked fine and the pump bushing looked fine so I put it back together with nothing more than a new seal.

The early E4OD transmissions had bad front seals and they would fail from heat.