I would clean up around the gear box and see if it is leaking. It sure looks like it is. If it is, I would drain all the oil out I could and then fill it with corn head grease. It will leak less when not in use but still provide the needed lubrication when being used.
If you have the time and knowledge remove the gear box an replace the seals. They are a simple gear case. The seals would be readily available by size. It would last you a life time then.
On the shear bolt. If you look the plates are thicker where the shear bolt is currently at. I would go 180 degrees and carefully drill a new square hole. Same size as the current one and use grade 2-3 bolts plus a lock nut. The thinner plates will wear out much faster if the bolt is allowed to loosen. Unless you are using it on a real big tractor you should rarely shear a bolt. I may have replaced one or two in ten years on mine. Those usually involves an ice chunk I should not have been blowing anyway.
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Today's Featured Article - Timing Your Magneto Ignition Tractor - by Chris Pratt. If you have done major engine work or restored your tractor, chances are you removed the magneto and spark plug wires and eventually reached the point where you had to put it all back together and make it run. On our first cosmetic restoration, not having a manual, we carefully marked the wires, taped the magneto in the position it came off, and were careful not to turn the engine over while we had these components off. We thought we could get by with this since the engine ran perfectly and would not need any internal work. After the cleanup and painting was done, we began reassembly and finally came to t
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