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My 81 has the SROD, and the speedometer cable is apparently "pumping" oil from the transmission up into the dash and cluster. This unit was rebuilt and then sat for several years, so the guy at the transmission shop reccomended using a synthetic blended oil in the trans to get her up and going smoothly. I'm using a valvoline 80/90 synthetic blend, is this just too light for this? I also recently made a minor repair to the shift rail, causing me to have to remove the top cover of the transmission (with it still in the truck). The fluid was a little low, so I topped it off with the cover off, so I could see the exact level. I filled it just to the top of the fill port, nothing too crazy; is this too full? I also replaced the speedometer cable awhile back, and I put the new rubber "O" ring on it. Any ideas?
The transmission should have a vent. It's in different places for different trannies, but even the automatics have a vent in the top of the tranny to relieve pressure as the oil warms up. Your rearend, transfer case, and frontend on a 4x4 all have vents, some with rubber lines hooked to them and some are just a small pipe with a metal cap on it.
I believe franklin is on the right track here. If the vent is plugged, heat buildup would lead to a pressure increase inside the trans, and that leads to oil leaking *somewhere*. Usually, thru the path of least resistance.
Also, I believe the vent for the SROD trans is located on (or near) that top cover you talked about having removed.
It looks like the vent is located directly in that top cover. It is simply a raised circle on the cover with a small hole in it, and the gasket underneath has a coresponding hole. As far as I can tell, there is no provision for hooking up a rubber line like the rear end and other components use. I can't imagine why it wouldn't be able to breath. I don't think its even possible to install the gasket incorrectly, but I guess i'll go ahead and double-check it.