The seal between the transfer case and transmission body is leaking.
The fluid is running out of the transmission into the transfer case then out the vent.
I replaced this seal on my brothers S10 blazer, my transmission go to guy told me what I would find when I had it apart he said the seal would be as hard as a rock and it would splinter like wood when I removed it.
He was right the job wasn’t that bad I did it on a dirt driveway 10 or more years ago.
