trans-oil feed index plugged

During disassembly I found the PO had plugged the oil feed index hole in the case and the bearing retainer with sealant. What type of damage can this cause? what type of wear paterns or damage should I be looking for?
thanks
JC

 

Might make it leak out the end of the bearing retainer. Pretty sure that hole lets the oil drain back if it gets past the "seal."

 

More info regarding what transmission and transfer case you have would be very helpful here.

 

My bad, I didnt even notice. T-90A-1 and Dana 18 transfer. I also noted the front thrust washer badly worn and grooved. I have a new Novak rebuild kit coming so does any of this matter?
thanks

 

The return hole plugged can cause the leak past the front felt seal used on the input shaft and can cause the bearing to overhead. Check and make sure the input bearing hasn't spun in the case.

Regarding the thrust washer wear, make sure the cluster gear thrust surface isn't excessively grooved as that is a common wear point. Also make sure the case thrust surface the thrust washer rests against isn't worn as that is also a wear point. Check inside the cluster gear carefully for wear, the cluster gear shaft for wear, and make sure the cluster gear shaft fits snug in the hole in the case it presses into as it's common for that hole in the front of the case to stretch or get worn and the shaft to not fit tight any more. This will not only cause leaks but allow the cluster gear to push away from the speed gears on the main shaft under load.