 Karl, you're guessing pretty good. That seal [see red arrow] is more than likely leaking trans gear oil into the PTO housing. [very common] ~It isn't the easiest of jobs as the whole rear housing has to come off the tractor. It is very top heavy so use care [& chains] when removing] it. Be careful pulling the hydraulic lines from the housing as they bend & distort easily & don't usually come out without a little finesse. ~The problem is,.... not only is the seal leaking [check the pump bushing & clutch drum shaft for wear also], but there is a very good chance that the lined PTO clutch plates are de-laminating due to the gear oil effecting the bonding [very common & expensive]. ~You probably should disassemble the PTO clutch & inspect the plates for de-lamination & wear & possibly the PTO brake is also worm. ~I have some pictures of the PTO at different disassembly levels so let me know if you need some additional pictures. I strongly suggest a manual if you are going to remove that rear housing & go into the power shaft clutch. It isn't rocket science but there are a lot of settings & adjustments that need to be watched & set during re-assembly.
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