Yes it sure sounds like the failure is going to be on the lower shaft....one thing I forgot to mention is that when I drained the trans/diff oil while putting in the new seals on the counter shaft and main trans shaft. There was a large amount of water in the gear box... I would estimate at least 5 gallons. The insides don't look rusty but I would bet this tractor sat for a long time out side and water got into it and just sat on the lower transmission shaft.
I would have to assume this is what has cause this failure.
The thing that puzzles me is how that amount of water accumulated in the trans. It looks pretty well sealed up. I guess 40 years of water seeping through to top plate bolt holes?????
This tractor will never be stored outside while I own it so this won't be an issue again.
I will get busy popping off the top plate and let you know what I find
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