Berryville, As others have said, that is typical water in the oil. Here is the cleaning procedure I wrote several years, ago. Note, last week a fellow said he propped up the back end on jack stands and Ran the Transmission and lift up and down with diesel to clean it out. Seems like it did a good job. Do not put in new oil until it is completely clean, else you will contaminate the new oil and be tossing it out too. Prior post....
To refill you will need 6 gallons of oil. Check NAPA"s price, ask for PN 65-205. That is a 5-gallon bucket of the GL-1 oil. Cleaning procedure There are three drain holes and one filler hole. Note the fill slow at the end comment. As the filler hole is in the front of the case and the dipstick is at the rear. Only fill with four to five gallons, then fill 1 quart at a time with a couple to 5 min. wait between quarts. This gives the fluid some time to level out so that it can be read on the dipstick. The first time I changed my oil I overfilled by more than a gallon, I had oil coming out the axils on the breaks... what a mess. This is a job you do not want to do too often, so plan it right. Determine all the maintenance that needs to be accomplished while the transmission is drained. (PTO seal, Pump repairs, Hydro leak fixes, axial seals etc) Get the parts and get them done while you can. This is the procedure I used to clean my transmission oil housing. You will need to wash out the old fluid. Any remaining fluid will contaminate the new fluid. If you have time in the evenings start to drain the tractor now. She will drip for hours/days. You should also be prepared to deal with the gallons of fluids you the will gush out of the tractor. Have containers ready to pour the old oil in to take to your auto parts store for recycling. Do your lift arms drop/leak down quickly? If so prior to draining the fluid pull the right and left side inspection plates. Lift an implement and look to see where the fluid is leaking out of the system as the lift lowers. Then you can repair/replace the required parts without the fluid in the way. I would also recommend the you replace the PTO seal and O-ring seal if needed at this time and replace the inspection plate gaskets. The inspection plate gaskets are fairly easy to cut yourself if you need to. Open the drains one at a time to handle the gush of fluid. Once you have gone through all of them open them all up again with a pan under each and let it drip at least over night. Make sure your lift control is in the down position to drain the piston. You should plan on "Washing/Flushing" out the inside, particularly if you have water in the oil... i.e. if brown/milky. To wash the inside use either kerosene or diesel. (Note: It is generally recommended and I agree: DO NOT operate the tractor with your cleaning fluid in the transmission) I put mine in a garden sprayer and sprayed the insides down. I put the garden sprayer nozzle everywhere I can, up the PTO shaft opening, if you pulled it. Through the Filler hole, through the inspection ports, through each drain plug. I catch the diesel in clean oil pans let it settle then decant the "clean" fluid off the sludge and spray again, and again. Go have a beer and let it drain. I then wipe out the bottom with clean paper towels to get the crud out. (do not use cheap towels here you do not want them falling apart). If your fluid had water in it, the "Milky" oil will continue to appear for a while, I just came back and wiped it out again, and again until gone. This is a good time to do other maintenance. Grease the fittings, Pull the air filter and clean it. Be sure to do the diesel flush with good ventilation. The fumes are powerful. Button her back up with your new seals and fill. Toward the end fill slowly... i.e. quart or 1/2 liter per 5 to 10 minutes, to let it all even out in the sumps. The first time I changed the oil I did not do this and I over filled by a gallon and a half. And because I did not wash out the back that gallon and a half was now water contaminated and useless. You will be glad you did this when it is done. Jeff p.s. all that said. Letting a gallon or two of diesel or kerosene sit in the transmission case overnight will eliminate a lot of paper towels. Driving it around with out any load will not hurt the transmission gears. The only reason to drive around is to slosh the cleaning solution around... thus you have to decide how effective that would be. I do not believe you need 6 gallons. a gallon or two is quite enough. Jeff
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