A leak developed from a known problem by the oil pump inside the transfer case. It becomes loose from it's mounting retainer clip and eventually rubs a hole through the magnesium case housing. ( See Photos ) The real fix is to remove the casing, weld repair or replace it and install a "case saver" ring behind the oil pump before reassembly. Here is the link to it: http://www.riversidegear.com/categor...oduct-630.html
However, the cost for that repair can run upwards to $1800.00. So, I am attempting to J-B epoxy weld the defect in hopes it will stop the leaking before I am commited to pay for a full repair. I will post the results after the epoxy cures. skoot 61

 

The repair is still holding after driving 6000 miles so far. First I cleaned the area with lacquer thinner, then sanding with emery cloth and another final lacquer thinner cleaning. I mixed some J-B Weld plastic epoxy and pressed it right into the crack with my finger. Next, I applied a smooth reinforcment layer over the defect area and also positioned a 100 watt bulb near the repair to allow epoxy to cure completly for 24 hours.
(I live in New Hampshire and temps run low at night) I have my fingers crossed hoping this repair will last for awhile till I can save some extra cash for a real repair if I should eventually need it.

 

Not sure you are still following this dated thread, but I suspect my truck (2003 K2500) has this issue. Is the repair still holding up. Based on your description, it sounds like you did not remove the case, just make the repair in place?

Thanks in advance.

 

The repair was made in place without case removal. Still holding after approx 20K miles.

 

Wow thats great!

 

I purchased a used transfer case of a friend and its lasted over 5 years its too bad no one makes performance ones that a much more beefy for a reasonable price

 

Scoot61, that is some excellent information! My 02 2500 HD is leaking transfer fluid. Not a lot but it shows up around the case bolts. Is not leaving a puddle just a very slow leak. Did you have fluid around the case bolts? I am trying to figure out if I am having the same problem that you had.
Don

 

Your probably having same problem. I have a friend owns a garage seen lot of chevys with the problem. Also a friend gm fixed one for him , did same thing again.
So he traded it off at a dealer ship. Some poor person going to get a lemon.
He got another chevy , done the same thing. Don,t get me wrong my favorite is chevy.
But the older ones , I have a 91 silverado would not take nothing for it. GM tried to retool everything to quick 98 to 2000 , then tried to retool everything again .
Cost a company lot of bucks every time they retool . Run into lot of problems down the road , getting in a hurry . That i s my two cent worth.

 

Actually, I have owned a 77,79,84,92 Chevy pickups. I put high mileage on all. I cannot count the number of timing chains, transmissions, rear ends, transfer cases, front ends and engines I had to replace, not to mention leaking fuel tanks and pools of oil wherever I happened to park the vehicles. I have 130,000 miles on my 2002 HD, LT, 8.1 liter w/ Allison 5 speed, extended cab, 8 foot bed. My problem is some fluid on the transfer case. Not enough to leave even one drop on the pavement. Never left me stranded, knock on wood. Still in excellent condition, inside and out. I must say this has been the absolute best truck I have ever owned. Close second would be the 84, 454 motor with manual tranny. I did, however, have a long list of repairs to get the 430,000 miles out of her. I do love my 02 and plan on keeping it for many more years.
Don

 

Donbar, Try cleaning the transfer case off with brake cleaner, dry it off, do a quick test drive and check the casing for fluid creep. If its a case leak from pump rub follow the repair I made, if it's a gasket or loose bolts use your best judgement. Good Luck!