Thanks, it seems like this was the cause. Fluid drops at start up and then levels off. The hoses to the rear end seem to be damp, soft and leaky. Honestly the rubber lines look like they are tired and could explode at any minute.
I'm going to remove the rear wheel system when I swap the rear end to a LSD, any thing I should be aware of as I do this?
I plan to cap the lines/outlets that feed the rear system, and hope to keep the take off parts in case I need them at a later date.
Do I need to "fix" or lock the rear rack?
Jeremy