There is an air vent right above the pumpkin but it shouldn't burp oil. It looks like the rear differential fluid hasn't been changed - might be worth doing and see what comes out.

Stole this image from @plain OM

Rear Diff Leak

My '97 Outback is leaking fluid from the rear differential. The source of the leak is on top of the differential. So I need to drop it to make the repair. But before I do, does anyone have a diagram that shows the differential and what might be the source of this leak? I only have a Haynes...

www.subaruoutback.org

 

There is an air vent right above the pumpkin but it shouldn't burp oil. It looks like the rear differential fluid hasn't been changed - might be worth doing and see what comes out.

I know I have not changed it since I have had it. Now on my list of things to do.👍

 

I now believe these are what is causing the mild clunk when I put this beauty into gear and more so of a clunk when I shift to reverse.

I had clunking in the rear when my diff bushings were shot. I fixed them using Whiteline rear diff bushing inserts. If the bolts for them aren't in good shape when you pull them out to install the inserts then you can still get new ones from a dealer or online.

 

Thanks for that information. I am in fact concerned about the condition of those bolts. Hopefully they'll come free when I get to it.

 

Your pic shows shot diff bushings.

 

Yessir! When I xferred the pic to my puter, I zoomed it up and could plainly see the tears.

 

If anyone has any tips for removal and replacement, I'd appreciate it.

 

I just went through 2 hacksaw reciprocating saw blades and half a 4" cutoff wheel removing the rusted off rear flange from my resonator pipe. Those bolts looked just as bad. Surprised as they were only about 3 years old from when my resonator side rusted off. This time it was my muffler side.

 

PB Blaster and heat.

The other option is just get a tube of window well and fill in all the gaps around the bushings. That's what I did to the VDC and it still works.

You have to block up the center differential so the bushings are at a neutral position and then fill it with window weld and let it sit for at least 24 hours if you go that route.

 

The other option is just get a tube of window well and fill in all the gaps around the bushings. That's what I did to the VDC and it still works.

I also did this to a Outback when I didn't want to deal with replacing the bushings, it was my winter beater. I just jacked up the rear diff a bit so he bushings were neutral, taped off one side so all the window well sealant didn't squish out and filled them up. Let it sit for a few days and it was good to go. I drove it like that for a few more years and it held up fine.

 

Getting the nuts and bolts free I can do, one way or another. How about the bushings themselves? I saw someone asked that sometime ago. They got no replies and never elaborated how they went about it.

 

I recently did these on my 3rd gen, which looks almost identical to the 2nd gen - though mine weren't as rusty (lucky for me).

I posted about it in my build thread, right here: Gen 6 - My 2006 Outback 2.5i maintenance and build thread.

 

That was very informative and looks like all I needed to know. On to shopping for the parts now. Thanks!🙂

 

New bushings came in today. They looked much bigger in my hand than they did in the differential, so I went under and compared to be sure before I try anything. They match.
While at it, I looked for that vent cap. It is still there. I gave it some twists and tried to pop it out by pulling up. It didn't budge. I did hear air being sucked in through it when I first tried to twist it. I must have worked something free from blocking it up. I don't see anything on it in here. Anyone got a run down on how this thing installs and works?
May attempt the bushing replacement this week. Going to try to borrow a lift.

 

There's a guy who did his forester one and I'm not sure if it's identical to yours, which should be this part:

38354AA002 - Cap Complete Air Breather. 1Y - Genuine Subaru Part

Genuine Subaru Part # 38354AA002 (38354AA000, 622016000) - Cap Complete Air Breather. 1Y. Fits Baja, Forester, Impreza, Legacy, Loyale, Outback, STI, SVX, WRX, XT

parts.subaru.com

40 seconds in to the video is where it's relevant

 

Looks like the link you posted is in fact it. Mine felt like plastic vs. the metallic one in the video, which other than that appears the same.
He did mention the dirt keeping it from working.
✔
Going through water
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I saw in the pic you had posted previously it appeared it is held in by 3 tabs, so if I were to pop mine out, I should be prepared to do some lift by hose mod as the video did or have a replacement on hand. I like the lift by hose mod idea. That may be on my list of things to do now. My area does get flooded enough.