If it is dry inside the bell housing, then chances are your rear main seal is OK, which would be a good thing. The most direct way of at least figuring out the cause of your leak, would be the UV dye in the oil. There are a few places for engine oil to leak from these L35s. You have LIM/distributor, oil pressure sending unit, head gaskets (rare), valve cover gaskets (very common in my experience), oil pan, drain plug, remote oil filter/cooler lines and adapter, timing cover (which would generally be caused by bad front main or cam seal, or oil pan gasket), and rear main seal. The front differentials I have dealt are usually pretty leaky, but gear oil has an unmistakable odor. Oil falls down and generally towards the back of the truck. Follow the leak up and forward until you see it dry up and that will be the general location of the leak. Try and take a picture of the wet spots on the truck and post them up. Like they say, "a picture is worth 1000 words"

 

this is probably the best i could get. any ideas?

 

and this one too

 

Honestly, it looks like it could be a pan gasket starting to bad. That's way cleaner than what I am used to, and looks like a very recent thing. I don't see much oil/dirt caked on the aluminum. The seal on the drain plug is definitely no good. A new drain plug is less than $10 just about anywhere, and be sure not to over-tighten the drain. It is an incredibly common mistake, and can compress the seal too much. That and countless hot/cold cycles on a steel plug in an aluminum pan is going to make your life hell next oil change. Is the radiator leaking at all? What is your oil level at and did you check around where the dipstick tube enters the block? It will be on the passenger's side, right above where the oil pan meets the block.

 

The leak has been going on for over a month now. I check the oil each night when the engines cool and on a flat surface and always reads above the full line. As for oil near the radiator. I have seen a few drops on the lines running to the remote filter where the crimps are at. I was advised earlier in this thread to change them asap because theyre common problems in 4x4 jimmys and blazers. If it were you what would you do first

 

If it were me, I would PM Captain Hook on here :P I would personally start with a trip to the local parts store and get the remote lines and UV dye kit. your truck could be leaking from more than one location. And over filling the engine oil is a no no. Its killing your power and gas mileage, as the ears on the crankshaft could be contacting the oil pooled in the pan. Drain the oil, get new lines, replace the filter and throw in the correct amount of UV dye. Then check in 2 or 3 days time

 

just got the plug seals. i was reading on the box to change every oil change? that seems like a lot when the 2 dorman seals were 5 bucks lol. probably going to change the oil this weekend. but as for the level its fine again. is there anyway that all this oil could be just from the bad plug seal? atleast the oil i found on the bottom of the pan