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Some of those in that model range had an incorrectly installed vent that either has a kink or the end is as low or lower than the diff itself. Either will cause some seepage. Neither will cause the geyser in the pic. Are you sure it's not the front pinion seal or LH output shaft seal? If it's a diesel, I would look closely at the P/S pipes/hoses. The one from the pump to the hydroboost is a common fail/leak and the one from the booster to the gear is a close second. Whatever the leak is it's from a pressure system....the vent is not pressurized. Although the color of both axle grease and P/S fluid might look similar to the layman, it DOES NOT smell similar. You will know axle grease when you smell it.
HTH
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It was forsure axle grease. The best we can tell the vent was plugged up and built pressure. I cleaned the tube, changed the oil in the diff and all is good so far.
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