I have a 87 Blazer with a 350 tbi and a 700r4 tranny anyone have any ideas if I should keep this transfer or if upgrading would be the route to go?

 

Keeping the NP208 transfer case? Keep it until it becomes the weak link (ie breaks). Many people run these transfer cases with great success. They can handle the torque.

If you are looking to do something, protect the heck out of that transfer case. Unlike the cast iron NP203 & NP205, the aluminum transfer cases cannot withstand bouncing off of a rock.

 

I am leaking transmission fluid and it is dripping off the slip yoke. Is there a bad seal in the slip yoke or is it the transfer that needs servicing?

 

Sounds like a bad seal on the output. Pretty simple to replace.