I never met a old TO-35 that did not leak a bit of oil out of the front transmission seal. Just keep that upside down carter key loose and turning so oil will drip out. If the hold ever gets stopped up the oil with pool in the housing and ruin the clutch, ask me how I learned this bit of info.
I have had the front transmission seal in my 1957, TO-35 tractor replaced, but it still leaked some.
Problem with older high hour tractors, the shaft is worn and it cannot be repaired easily, so just installing a new seal may slow leak for a while, it will not stop the leak as the shaft is worn.
I understand that in the later models MF-35's with multi power, the front shaft was bolted to the transmission housing so you just bolt on a new shaft with new seal and were go to go.
The front transmission shaft on our TO-35's is a part of the transmission housing and cannot be replaced, so you are installing a new seal in a worn shaft, will not stop leak.
So what to do:
You might try a can of Lucas Transmission seal and keep the fluid level no more than at mid level, mine will still leak a bit, but none to speak of, I check it from time to time with lift arms in the up position and keep fluid level no higher than mid point on dip stick.
If this works, its a lot easier than replacing a seal that may not stop the leak.
If this procedure does not stop your (serious) leak then you will have to try a new seal, may can add two seals if there is room.
Many farmers when they found out about this problem traded off the old to-35's long before they got to this point as repair of the transmission shaft (welding it up and then turning it down would have cost more than the tractor is worth.