Whatever surface is riding on the inner lip of the seal is the one that matters. Also make sure you're not nicking the seal with the splines. Shouldn't, because there is a bit of clearance, but a rubber glove over the splines helps protect things.

As far as how deep...I usually get them flush. If it goes beyond, you might be missing the seal surface, (for the record, I don't know if this is actually happenening in this interface). When I'm driving a seal, I look for a driver that catches the seal and its boss to help prevent from going too far.

I do know when I did mine...the transmission came from an LJ with a 231. When I rebuilt my T-case (a 241OR) I replaced the input seal and it went a bit deep. I thought I would have to pull it and replace it, but decided to try it anyway. Its been dry since day one. Since you have the Terraflex front half, you might be on the edge of a good seal? I dunno...

I’ll compare the snout of a 231 with my Teraflex and see if they’re the same. Then I’ll take some measurements when I get back in there to see how much seal engagement I’m getting.

If I remove the TCase, can I just clean it up and shake it like crazy to see if there’s a leak? Then that would be a known entity.

I’m tired of messing with this, so I may take a few days off.
 
I’ll compare the snout of a 231 with my Teraflex and see if they’re the same. Then I’ll take some measurements when I get back in there to see how much seal engagement I’m getting.

If I remove the TCase, can I just clean it up and shake it like crazy to see if there’s a leak? Then that would be a known entity.

I’m tired of messing with this, so I may take a few days off.

Leave the side you think is leaking down and let gravity do the work for you.
 
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Congrats @JMT !! Excited for you!

I'm sticking with the 3rd pedal. It was good reading to watch your journey making that decision to go auto (it wasn't overnight) and then you did an amazing job documenting your past month making this happen. Enjoyed each post and felt those moments of bending (but not broken) spirit. You made it!

Can't wait to see the feedback from that first offroad trip!
 
Can't wait to see the feedback from that first offroad trip!

Thanks! I still feel like it’s unfinished till I resolve this leak. I too can’t wait to see what happens off-road!

There are parts of me that already miss that 3rd pedal. I will be able to say I’ve been on both sides of the wheelin’ fence, and hopefully I’ll enjoy this side as much as the other.

Some good news is the starter is working flawlessly after simply cleaning things up in the engagement compartment.

Tomorrow I plan to remove the TCase for the fourth time in a six days. I’m going to take my time, check a lot of things, and hopefully come away with a win.
 
I got the TCase off in 30 min! Here’s what I found.

Tcase
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Transmission
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TCase 4wd selector connector

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I don’t know if this is an O-ring or some other kind of ring. It doesn’t look like an O-ring anymore. If anyone knows that it’s not an O-ring, let me know. I’m headed to the parts store to get an O-ring to replace. Hopefully this will solve my leak. I don’t see anything at the transmission output or the case input. Could’ve simply been fooled by this connector.
 
I got the TCase off in 30 min! Here’s what I found.

Tcase
View attachment 505730

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Transmission
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TCase 4wd selector connector

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I don’t know if this is an O-ring or some other kind of ring. It doesn’t look like an O-ring anymore. If anyone knows that it’s not an O-ring, let me know. I’m headed to the parts store to get an O-ring to replace. Hopefully this will solve my leak. I don’t see anything at the transmission output or the case input. Could’ve simply been fooled by this connector.

It is just an oring and that one is definitely no good. Mopar number for it is 4338956 https://www.crownautomotive.net/Transfer-Case-Switch-Seal/4338956.html
 
I will go for a longer drive today, but if this solved my leak I feel like the swap is officially complete.

I went to a gravel parking lot and switched into 4H and 4L with lockers. Everything is adjusted. If the leak is solved I’ll put the TCase skid back on and then I’m ready to go off-road.

Forgot to mention, I’ll also be ordering an engine skid.
 
A few tips for re-installing the TCase or when you are installing a new output seal on the transmission or input seal on the TCase compiled from @mrblaiand @Mike_H.

  1. Check the TCase stub for any marring. Any tiny imperfection could tear up your new seal. Use Emery cloth or 320 wet sandpaper to remove any imperfections.
  2. Put a healthy amount of bearing grease on the inner lip of the seal and test fit it to the TCase stub to make sure it fits snug before installing.
  3. Install the seal flush with surrounding surface. I use PVC collar fit to size at the store. It’s nice if the lip of the collar is both on the seal and surrounding area so it doesn’t go in too far. Be careful. Go slow. Tap it in evenly. Sometimes a piece of wood held on the collar can help you tap it evenly. Don’t get it in there cocked.