I changed my oil tonight and I noticed that the right side of my front diff was all wet with diff fluid...I checked the level of my diff fluid and it was normal and I have been smelling burning oil when my car is idling
the side differential axle stub seal is leaking...or normally that's what it would be. quite a rare issue to have even on 1980's Subaru's so you've got some bad luck or the source may be elsewhere?
you're fairly certain it's the front diff?
i assume it's the 2008 in your sig? while not terribly involved or difficult that seal is not easy to replace. the outer retaining ring has to be spun off to gain access to the seal. the key is that this retaining ring also adjusts the backlash for the front differential gears, so you have to install it exactly as it was before it was removed.
so - mark the current location with one mark on the retaining ring and one on the trans so it can be installed the same way, then simply spin it off and count how many spins it takes to remove it....reinstall the same number of threads/spin/revoluations - and to your original mark.
Yes I'm positive that it is the gear fluid....Both my front axles have been replaced in the past 6 months and the fluid seems to be slowly leaking out from the passenger side where the axle goes into the diff...