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It appears as though I have a leak between the case(7375051) and the cap(sp-18-19-33) on my transfer case. I recently replaced the seal(500068) and reassembled and refilled with fluid but it seeps out. My question is are the shims(7373158,7373159,7373160) supposed to seal things up or should I have applied some sealant between the shims and between the shims and cap and between the shims and case?

Are you 100% certain that the joint between the cap and case is the real source of your leak. Those shims seldom leak. The shaft seal you changed is usually the leaker in that area but folks often overlook the requirement to seal the splines with RTV. That 500068 seal only seals the outer smooth surface of the drive flange.

Sure looks like the fluid is coming from between the shims but I will wipe it down real good again and observe it closely and make double sure.

Let the jeep sit for a couple of days checked it today and the leak has slowed considerably but I am thinking this is due to the cooler weather and the gear lube being thicker. Still see some dampness near the shims.

I don't know if this is applicable to your problem but I had leaks around my yokes. It turned out that the seals I was supplied were Chinese made and did not fit tight around the end of the yoke. I had put sealant on the splines. I was at Mullins and he showed me the difference in fit between what I had been sold and the American made seals and the fit was much tighter. I replaced both seals and my leaks stopped.

I used a light coat of copper coat spray on the shims when I assembled mine. It added a slight amount of thickness to the stack but it will still well within specs so I didn't remove a shim or clean off the coating. A very light dusting is all I did.

The yoke is more than likely leaking. Did you use RTV on the splines of the yoke?

Yes I did apply rtv to the yoke splines but I am 99% sure the oil is leaking between the shims. I wipe that joint good and dry then the area will gradually get wetter and wetter until it forms a drip it may take a few days but it will eventually drip although it has slowed considerably which I attributed to the cooler weather and the gear oil thickening up.

What was that old line?

If your jeep isn’t leaking it’s probably out of oil...