Gotta leaky differential problem in my '70 2800cs. I bought the car about a month ago and it had been leaking just a few drops in the garage. After a 150 mile trip to the city this past weekend, the diff seemed to leak more so I decided to inspect. I checked the level and it was real low so I changed the oil and added new washers on the drain plug bolts. The oil was so low only 1/2 quart was drained when changed. It was very dark colored and had a burnt smell to it. Hopefully there is no serious damage to the differential resulting from low oil. It never seemed to make any bad sounds, however oil is all over the rear muffler and drive shafts.

After a de-greasing job I think I found the leak. It seems to be where the propeller shaft attaches to the diff. I know it is a pain in the [Oops!] to change the seal in there from reading the repair manual. Also, the previous owner changed the seal already. He told me that it might be leaking from the top of the differential from the venting tube, although he admits that he might be thinking about his Porsche differential he had worked on. I think it might be leaking from both places since there it lots of oil on top.

My diff is the original one that came with the 2800cs (3.45). The car now has a 85 535i engine and transmission. So my question is: take out the differential and repair the seal myself or find one to replace? Considering that the previous owner had already replaced the seal and it might be on the verge of failing, I think it might be time for a new one. What ratio would work best with the 5 series engine and transmission? Thanks for your help.