Dave, if you are sure the pinion seal is not leaking, (I doubt that it isn't), then the only other prospects are the halfshaft seals on either side of the case are leaking or the case is cracked. The driveshaft has no internal lubrication. Another possibility is that the oil may be coming from somewhere in front of the differential, although, I don't know of any blue ATF out there or engine oil for that matter.

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Jeff L
1987 300e
1989 300e
1987 BMW 325

[This message has been edited by jeffsr (edited 04-21-2000).]