T150 / Dana 20 fluid swap issue

I recently rebuilt my transmission and transfer case, along with pretty much everything else in my Jeep. I noticed a small puddle of gear oil in the garage the other day, crawled underneath to find oil splattered everywhere. It looks like oil was coming out of the transfer case vent and being sprayed by the drive shaft. I opened up the t-case fill plug and oil came gushing out, check my transmission which was over a quart low. Looks like all the oil from the transmission moved to the transfer case. The rebuild kit included the ported style gasket, I left the holes unobstructed. Rear transmission seal was installed with the groove side facing the transmission. Any ideas before I yard the whole assembly apart? Not looking forward to pulling everything out.

 

Make sure the seal was installed correctly, if I recall, it doesn't go the way you think it should.
Huge factory recall 35 years ago or so for this very problem.
I know we replaced a couple hundred seals and gaskets...I think the gasket was changed as well...maybe
We replaced several transmissions too.

 

I've seen various posts about the recall. I had no reference when I rebuilt the transmission. Previous owner removed the seal and replaced with about a gallon of RTV. Took me forever to separate the transmission and transfer case. Leaked all over the place because of that.

 

The lip of the seal faces the transmission. Look at the lip, not the opening in the steel seal shell. Also make sure the transfer case input gear is not grooved or pitted where the seal rides.

 

I'm going to start tearing into it this week, will let you know what I find. Thanks.

 

Nickmil, is this correct? The rubber seal looks fine, no tears or burrs. The sealing face of the gear is nice and smooth. Transfer case and transmission vents are clear. Should I also plug up the hole to the left of the seal?

 

If I'm reading the instructions right, I screwed up.

"Be sure the seal is installed so the metal side of the seal faces the rear bearing and the seal lip faces away from the bearing and towards the rear of the transmission."

 

IT looks to me the seal isn't driven in far enough . to seal on shaft

 

The seal is fully driven. It already seems like there isnt much bite / resistance when I put the gear back on, like the seal is recessed too far. If the seal is oriented correctly, maybe I just have a bad seal.