What is this? Thin spring inside where slip yoke enters transmission

[Grumpy old man]

The fastest way to find the leak is to clean the area with brake clean then dust it using baby powder . The wet powder will show you exactly where the leak is coming from fast .it works whenever your chasing any type of leak be it radiators to valve covers /distributor /oil pan / trans pan and once your done it hoses off without a trace .

[centuryhouse]

I will try the baby powder trick, thanks.

So this morning I went out and there were a few drops worth of leaked trans fluid under the rear seal. I took a towel and confirmed no wet around or under the speedo cable, no wet around or above the extension housing. Then I completely dried up all the way around the seal where it meets the yoke, and completely dried all around the outside lip of the seal where it mates against the extension housing.

A few hours later I bought a NAPA seal and some sealant to put around the edges. But when I got started I realized there wasn't a single drop or any wetness anywhere. Not a drop around the seals outer edge, or around the inner ring where it meets the yoke.

I guess I will apply baby powder, and see what happens.