Do you know if this tractor was ever subjected to a full-on teardown, and a part-by-part repaint?
If so, sounds like someone painted the inside of the transmission housing, which was a BAD idea.
Hopefully you can flush the crap out by removing the PTO and spraying down the inside of the housing using a pump sprayer and kerosene (just don't light a cigarette). But, if multiple oil changes haven't cured the problem, you may be chasing your tail for a while.
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Today's Featured Article - Tractor Profile: Earthmaster - by Staff. This tractor, manufactured by the Earthmaster Farm Equipment company in Burbank, California was made for only two years. The Model C came out in 1948 and was followed by the "CN" (narrow-width model), "CNH (narrow-width high-crop model), "CH" (high-crop), "D" and the "DH" (high-crop) in 1949. The main difference between the models was tire size, tractor width and cultivating height. The "D" series were about 20 inches wider overall than the
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1964 I-H 140 tractor with cultivators and sidedresser. Starts and runs good. Asking 2650. CALL RON AT 502-319-1952
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