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Ok, I went out and fired it up again and let the air pressure get over 60 PSI. Then I engaged the axle, shut off the engine and disengaged the axle. This time I watched that little vent hole behind the plate and sure enough oil sprayed out when I disengaged it. Only this time it was kinda...

Is yours missing the label? I believe left is engaged and right is disengaged. It's got a light that comes on when it's engaged, too but I wouldn't bet on that working. You should hear it make a *pssh* sound when you disengage it.

I went out today and took the cover plate out to get at the transfer case. Then I removed the TC vent (it hissed a little pressure releif when I removed it even though I hadn't driven the truck in a week), sprayed it out really well with brake cleaner, then put a liberal amount of 3 in 1 oil...

the stuff coming out of mine isn't black, tho. it looks like fairly clean gear oil.

Ok... I believe I have the same problem, but I don't even know how to start doing what you described. Is the transfer case cover under the passenger bench? If so, I need to flip that up to unbolt the cover, right? What's the transfer case vent look like and where is it located? I tried...