I have a 1995 K1500 short bed with a 6 in suspension lift, 3 inch body lift and 37 inch tires. I am having problems with my transfer case leaking at the rear output seal. The transfer case has been replaced and the seal has as well. I am exhausted by the problem. Does anyone have any suggestions on how to stop this?

 

sounds like the angle of the rear drive shaft is too much and causing premature wear and failure of the rear seal

 

Had a similar problem in the past and i figured out that surface had some rust on it. When I got rid of the rust, there were signs of improved performance and finally got the problem solved... Not sure if it was really the problem or just my luck!!!