If it looks like that you have a leak
Mines dry after 180,000 miles
Leave it be and more dirt etc will get in
Clean it real good and find out what the problem is

They will get like that over time. Mine looks the same way. I wouldn't worry about it unless it quits working or fluid is dripping out a lot.
Have you changed your transfer case fluid yet?

If it looks like that you have a leak
Mines dry after 180,000 miles
Leave it be and more dirt etc will get in
Clean it real good and find out what the problem is

How do I know if I have a command trac or select trac tranny case?

If I do have a leak what should I do to go about fixing it?

Honestly, it looks normal to me. Give it a good scrub, and keep an eye on it. If it's leaking, it's probably just from the gasket/RTV sealant holding it on. That's what you look for. If it's parked overnight or for a few days, put some card board under the Jeep on your driveway by where it might be leaking.

It it is leaking, changing the fluid and replacing it with a new gasket or sealant, whichever is correct for that Liberty, would probably solve it. Worst case scenario, new differential cover in case the original is warped, in that case, you'd still be replacing the fluid.

Highly recommend changing the fluid sooner than later anyway.

My bad. It's not often that those parts get cleaned. Next chance you get, do exactly that.

Will do. And if there is a leak all I have to do is repair the seal?

You keep them clean so that if you do have a leak you can see right where it is
Its more than likely just the seal but spray it off with engine cleaner, hose it off and then watch it closely to see what it is

no-one appears to have mentioned it, but you likely have an NP/NV231 or NP/NV242 transfer case. There are only a couple variations used on the KJs, and most of the gas models have the first one. To be sure, find the ID tag on the back of the case (usually to the left of the rear output shaft) and clean/read it. Command-trac refers to the series of transfer cases that have 4HI/2Hi/Neutral/4Lo option (i.e. the 231). Selectrac refers to the family of cases that added a center differential for a "full-time-4wd" option (i.e. i.e 242).

Assuming you're correct in your diagnosis, knowing which case it is makes all the difference. The "output shaft seal" is what you want, I believe, and depending on the model, should be pretty easy to remove and replace. Not sure if you need to slide the seal off the shaft or the other way around. It might depend on what's covered up by that boot (i.e. can you remove the slip-yoke from the shaft to allow the seal to slide off).

Here's what a tag looks like:


Dan