Went wheeling today in my Cruiser (1990 FJ62 135k miles stock drivetrain), pulled an FJ80 out of a big mudhole. During the pull and then on the way up the hill out of the hole myself I heard an intermittent high frequency grinding noise (it sounded exactly like when I pressed the 4WD button once last winter with the hubs unlocked). I was in 4 low, under load, constant throttle, front wheels straight ahead, some wheel spin but making good headway. Drove home in 2WD. Here's what I found: The grease in the locking hub is no longer the red wheel bearing grease I packed it with a couple months back when I replaced the wheel bearings, seals, and brake rotors. It is now gray-green and opaque. The locking hub and the end of the axle shaft looks fine, so I don't think the noise came from there. The grease around the outer wheel bearing was rusty! The rest of the grease in the axle hub was still red but creamy, except around the inner wheel bearing, where it looked fine - still red and translucent. The outer bearing is burnt but otherwise fine (no gouges, spins freely), but I'll replace it. I did find one piece of (metallic?) grit near the outer bearing while cleaning out the hub. There was no rust in the locking hub. All of the gaskets and seals (inner wheel grease seal, hub body gasket, hub cover gasket) look fine - they are almost new (as I said above I replaced all this stuff a few months ago). Questions: Could the wheel bearing have been the source of my noise? Where did the water in the outer bearing come from - did it come from the knuckle and travel into the outer wheel bearing through the slot in the top of the spindle? I did squirt some black moly-lithium grease into the knuckle at the time of the brake service, so this is the grease that's making it into the locking hub I think. Does this mean I have water in my knuckle? What next? - knuckle/axle rebuild? thanks for any pearls of wisdom..