Transfer Case Leak and Slipping Out of Gear

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Joined
Feb 15, 2026
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Location
Nicaragua
Hi all,

I have a 1979 BJ40, and am having issues with the transfer case. There is a high pitch whistle once I hit third gear, and it keeps popping out of 4wd when engaged. I changed the fluid which helped slightly temporarily, but I have now identified a leak at the back of the T-Case, on a cap near the fill plug. Additionally, I find that the issues are most prominent when in 2wd. It is almost as if something in the gear box is pulling it out of gear when at any speed above a crawl.

The below picture was found online, but better identifies where I am seeing a sizable leak. It's the black cover to the right of the circled plug. Any ideas what this is called, or a good DIY fix?

Any advice would be appreciated. thx

1790900447193.webp
 
That’s the main shaft that the gear set rotates on. If I remember correctly, there’s an O-ring on the end of the shaft that seals it preventing oil from leaking out. Could be your seal is deteriorated causing the leak. You have to split the case to replace the seal. If that seal is bad it’s likely the rest of the seals are on their way out. Probably best to get a rebuild kit, watch OTRAMM’s rebuild video, and rebuild it yourself.
 
That’s the main shaft that the gear set rotates on. If I remember correctly, there’s an O-ring on the end of the shaft that seals it preventing oil from leaking out. Could be your seal is deteriorated causing the leak. You have to split the case to replace the seal. If that seal is bad it’s likely the rest of the seals are on their way out. Probably best to get a rebuild kit, watch OTRAMM’s rebuild video, and rebuild it yourself.
Thanks for the quick response. I was thinking I might need to rebuild at this point, and it seems like a good project to learn some on. Any recomendations on which kits are best, or are they all rather similar?

Should I be safe to drive it until I can do the rebuild, as long as I keep an eye on it, or is that something that is likely to lead to damage?
 
I believe I got mine from CruiserTeq. I used the Toyota red anaerobic sealant and have zero leaks. You should be safe to drive in the mean time.
 
You can sneak out the idler shaft JUST enough to get a new O Ring installed.. pull it out any further and the transfer case has to be disassembled. This wont help with your transmission issue though, its rebuild time for your transmission.

1790910503472.webp
 
Will a rebuild likely help the issues with shifting out of 4wd/2wd etc.? Looking at the kits, they seem to be just seals & bearings. I gather this won't change much if the gears are actually warn.

Also, does anyone know the part name/number for the shaft cover?
 
Is your tcase vacuum shifted ? If so it could be a simple vacuum leak for the slipping outa 4wd. That o-ring on the idler shaft does leak, usually when the thrust washers at ends of idler gear wear which equals heat. The cone cover can seep some, the nose cone to dline flange can seep some, just dont let it run dry. You can pull the inspection/pto cover and have a look to see if theres something amiss inside and check the interior case bolts (2) as well.
 
Will a rebuild likely help the issues with shifting out of 4wd/2wd etc.? Looking at the kits, they seem to be just seals & bearings. I gather this won't change much if the gears are actually warn.

Also, does anyone know the part name/number for the shaft cover?


Can't really help you with the popping out of gear, it might need new springs for the ball detents that keep it in gear. Having your transfer case rebuilt should fix this issue.

Where you are seeing the leak is not a shaft cover it's the idle gear shaft itself (see attached image). As mentioned it is possible to replace the seals on this shaft by slightly pushing it out of the case either direction just enough to remove and replace those O rings but if you push it too far thrust washers and eventually bearings and the idle gear is going to start falling off the shaft....so if you attempt this yourself don't push it further than needed to replace those O rings!

Screenshot_20261002-102942.webp



Oh and almost forgot the Mud welcome! :flipoff2:
 
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The nice thing about resealing the t case is you are also “inspecting” everything gear tooth wear, shaft wear (loose fits). The reason none of those are in the “kits” is it is yet to be determined what is worn. AFAIK no single area is so common that it is included in kits. Tear it down.. it’s “Fun”!
 
Wear on the idler shaft is very common so new idler shafts are included in the better kits such as the ones from Cruiser Outfitters however if that's worn then probably so are the needle bearings and the inside of the gear that rides on that shaft DAMHIK.

"It's "Fun!"". 😀
 
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Thanks for the replies. This is immensely helpful. Based on the replies, it sounds like it's a good idea to do the rebuild regardless, so I think that's the direction I am looking. Is there anything in particular I be on the look out for besides usual wear, gears, etc?

@peesalot I am unsure if it's vacuum shifted or not? How can I check

@60 40 To confirm, are you suggesting that a standard rebuilt kit, should help with the shifting out of gear or just help me to identify the issue?
 
Sure it should fix everything.....

Just kidding you have no idea what the issue is or if there is one yet you need to look at the linkage to the case and other things before proceeding. What you may need for the repair won't be known untill you know more.

Plenty of research and learning to do..... or find someone who knows what they are looking at to look it over?
 
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