I replaced seal where my drive shaft slides into my transfer case because it was leakin. But I drove about 2 miles down the road and the brand new seal just popped out and shot transmission fluid all the over the place. So I pushed it back in and didn't drive it for a day. On my way back to school yesterday I got about 30 min down the road and it popped out again. Does anybody know why this happening? I'm losing a lot of tranny fluid, if anyone has any advice or information on how to fix this please let me know. If you need pictures let me know too and I'll post them.

 

It sounds like the race behind the seal is worn letting the end of the driveshaft droped down and its poping the seal out. How many miles on the transfercase?

 

Everything on the truck only has 82,000 miles on it. The old seal wasn't poppin out and everything looked right when I pulled the driveshaft out and out put the new seal in.

 

I can't imagine that seal popping out. There should be a slight interference fit as the seal is driven in. Also. Are you sure it is the correct seal? I suppose like 87 said, that a build up of hydraulic pressure on the back side could do it as well. There is a bushing inside the aft end of the tailshaft housing that has some small oil galleries. If this bushing is allowing that oil to escape towards the back, that could do it too. The bushing is easily changed with removal of the housing a piece of pvc to drive it out/in and a hammer.