First question is are you sure you don't have too much oil in the trans. They don't take much, and it's easy to over fill them.
Pull the level plug near the left brake connection and make sure none comes out.
If the level's ok - I'm not 100% sure - but I believe there's an inernal "weep hole" of sorts in the housing that allows the gear oil to flow through and not accumulate.
Even though it wasn't that long ago that I rebuilt mine - for the life of me I can't remember exactly where it was, or what I'm thinking about! - I just remember being surprised to find a hole somewhere in there that was plugged with sludge.
I'd pull the drive off, clean it all out with kerosene, and check things out - or perhaps somebody here with a better memory can clarify - I could be way off.
The housing comes over very easily - just be sure to retain the thin spacers if there are any - (sort of like thin metal gaskets).
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Today's Featured Article - The Day Mom Drove the 8N - by Brian Browning. My Dad was wanting to put in a garden but couldn't operate the 8N and handle the old horse drawn plow he had found and rigged up to use with the tractor. Well, he decided to go get Mom out of the house and have her drive the tractor while he walked behind the plow. You got to understand that while my Mom is a hard worker who will always help whenever she can... she had never operated farm machinery before that day. Dad got her out there, explained how the clutch was the same as in our o
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