I would drain the new oil back out and strain it, and try some of the home remedies mentioned here for separating the water. Meanwhile, fill the diff with diesel fuel and drive it around a little, let it sit a day or two, drive some more, etc. That will break loose a bunch of the crud.
When I first drained my SMD, the stuff that came out was about the consistency of ketchup. I was only able to get enough out to fit about 9 1/2 gallons of diesel in there. After a month or so of soaking and periodic driving I drained the diesel, let some of the crud settle out, and poured a bunch back through in an attempt to rinse, all the while scraping what I could through the drain hole with a heavy wire. Afterwards I was able to get very nearly the full 13 gallons of gear oil in it.
As a side note, when I put the diesel in, the transmission input seal poured diesel any time the engine was running. I decided to split the tractor as I had a slight rear main leak too, and didn't know about the clutch condition. After a new rear main seal, new clutch, new transmission input seal and a redi-sleeve on the input yoke, it's all dry now, and I believe the tranny & diff survived.
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Today's Featured Article - Identifying Tractor Noises - by Curtis Von Fange. Listening To Your Tractor : Part 3 - In this series we are continuing to learn the fine art of listening to our tractor in hopes of keeping it running longer. One particularly important facet is to hear and identify the particular noises that our
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