OK I need some brains here. I am buying my friends near Mint 93 300TE and the big flaw is that at high speeds it seams to leak fluid from the pressure bleed valve at the top of the transfer case on to the exhaust, not at low speeds though. My friend thinks it could be a bad pressure valve or the system needs purging. I have little 4 matic knowledge and could use some expert advice. It leaks most of contents out over 500km highway driving.

The transfer case hydraulicly locks the front diveshaft shaft depending on traction conditions. When the seal for this mechanism goes bad the case fills with hydraulic fluid and eventually vents it out of the overflow. The solution is to replace the transfer case which is not a cheap endeavor. Repair usually isn't feasible as the aluminum in the area where the seal fails tends to wallow out. The new cases are upgraded and have a steel sleeve to prevent this. If you go for a used case make sure it is a new style part. Either way, it will be worth the cash to repair it. The 4-matic wagons are great driving cars and with lighweight wheels have amazing grip, not to mention they are real workhorses when it comes to payload. One of the main reasons I'm in the process of buying another after my last one was hit and runned.

This is bang on, the shop has been screwing with this issue for months and all they needed to do was ask... Excellent. Do you have any tips where to get a new one in N.America for a 93?

I've only ever installed cases from the dealer. They cost a small fortune but I've never had an issue with one. I'm sure there are rebuilders out there but I cant offer any advise as I have no experience with them.

ya my friend's rebuild was the wrong part, $800 down the drain.

my friend says it's the bleeder valve on top that is leaking could this be an easy fix, or because the vacuum pump wasn't used in the process of priming the system? He wants to sell the car which is in perfect condition for $3000 CDN.
Could the transfer case be ok except for this little valve.

I've never seen the bleeder valve leak, nor have I ever had cause to loosen it. The system will prime itself without fiddling with the valve. I guess if you wanted to change the fluid you could bleed some out there.

What I have seen too many times to count is the case goes bad internally filling the case with fluid having it overflow out the top of the case near the bleeder valve. If your friend is adament then have him clean the valve area with solvent and compressed air and have him run it and show you the valve leaking. That will likely change his tune.