Hi Bob
CMPs don't leak they marking their territory.
Getting the bearing pre-load is tough, I wish there was a way to really check the transfer cases under-load before reinstalling them in the truck.
I agree go by the manual step by step. The shim sets were I believe originally coated with shellac, modern equivlent is Permatex product Permatex® Indian Head® Gasket Shellac Compound
http://www.permatex.com/products/Aut...c_Compound.htm
Seams to work but the synthetic lubricants do leak through almost anything. Only problem I've seen is that if it thickens up any it will not squeeze out from between the shims when you tighten the unit up, which kind of blows the fine adjustment of the shims, plus you have to clean all the shims each time you disassemble to add or remove shims to get the pre-loading perfect, personally I doubt that I have ever gotten a bearing load "perfect" usually I end up with good enough.
I wonder if the original Shellac sealant had a longer cure time?
Cheers Phil