Ok it was the seals between the transfer case and the transmission. I pulled the t-case off, pulled it apart and put all new seals and a new vac switch on, happy I did since I found that the t-case had been rebuilt fairly recently (somewhere between 15k and 20k miles). Now the only thing left is the front seal on the transmission. The blazer is drivable but I have to dump copious amounts of transmission fluid in to keep it at the full mark at operating temp. I hope it is only the front seal and I don't have to replace the torque converter or anything else.

Has anyone else had any luck in just replacing the seal and oil bump bushing and not having to do anything else? BTW I have access to a lift so I will be doing this myself, I just want to make sure I don't run into anything unforseen after I have it in the air.

Also what should I look for on the torque converter? I am going to pull the inspection cover this weekend and see if there is anything to see. Anyone have a good resource for images of bad vs good torque converters?

 

pull the vacuum line off the manifold and look for fluid that is less work

 

Not to sound too noobish but how does pulling the vacuum line from the manifold tell me if the torque converter is going out?

The problem of trany fluid getting to the engine was solved already now it is only the front seal (hopefully) leaking.