After some light wheeling I noticed a odd squeeling from under the truck when I would lift from the accelerator going around 20 - 30 mph. At first I thought something was loose and rattling but I could not find anything. When I looked under it again, I noticed a small wet spot on the street. Right above it was where the rear drive shaft meets the transfer case.
While driving today I did not hear the squeal except for when I drove the truck in reverse.
and my case always looks like that after wheeling....most 60s cases do. its when they stop leaking you should worry.
i would check the brakes for the squeal.
It might be the transfer case rear output bearing going bad. Was the transfer case ever low on gear oil? As the bearing goes bad, there is more slop in the output shaft and the output shaft seal will leak. The bad news is that you will pretty much need to rebuild the t-case to fix. I just did one, and if I can rebuild a split case, you can too. Fix it soon or it could trash the output shaft which could add considerably to the cost of a rebuild.
You might measure the preload in the output shaft-shift the t-case into neutral, pull the output flange and measure the turning force. If you feel any play or there is no preload, then a full case rebuild is in order. Good luck.