Yes, that is entirely possible, but what has leaked out is not milkey, and I've had the truck always under a tarp when not in use. I have not drained it yet, but will next time I'm there. When I got it from the USFS it was sitting under a tree for years. I could tell they never used it, because some of the tires were new, but were very cracked, not just checked. It takes many years for that to happen. It had send to PNW USFS wrote on the door. It's about 1.5 hours from home right now so I can't go check for water for a few days.
Being that the front axle seldom sees use, and then only at slow speeds, I'm thinking a thick pudding mix would be OK. There are no lockout hubs on this axle like most jeeps have. A pudding is common in the old Dana 25 &27 axles that leaked & seeped oil even when new. Turning under no load with a thick mixture in there doesn't seem to me to be a problem as long as it flows. Unless I hear of a problem I'm not aware of with doing this, I think that's what I'll do after I clean the brakes.