I have attached a photo of my 3rd of 3 leaks I need to fix. The other 2 where front and rear differentials, that I just finished taking care of.

After clearing off all the oil and gunk, I was able to see a drop or two of oil come out from behind that cover.
I am thinking that it might be the RMS from things I have read looking over oil leak threads.
I just wanted to get a 2nd opinion before I start the process of replacing it.

 

Is it leaking oil? Or is it tranny fluid?

Could be rear main seal, but it also could be any gasket above it. Make sure you verify that it isn't the back of your valve cover or your oil filter adaptor that is leaking, and dripping down to that area, mimicking a rear main seal leak. This is a very common thing. Once you rule both those areas out, you will be able to deduce that it is in fact a rear main seal leak.

 

I am pretty sure its oil. One thing I realized last night is that it doesn't leak, or at least as bad, when parked facing down hill. If it is on level ground, or facing up hill, is when the leak gets really bad.
What can that point to?

 

I'd be looking up above first. A leak at the back of the valve cover could produce the same symptoms. Don't jump on the RMS bandwagon just yet.

Almost any oil leak on your 4.0 is gonna drip from the RMS area for 2 simple reasons. First off, the engine sits nose-up and oil will run back to that area. Secondly, the RMS area is also the lowest point on the engine. Simple physics and the old plumber's adage apply here. "$hit flows downhill".

Valve cover gasket, oil pressure sending unit, oil filter adapter seals and distributor gasket have to be eliminated as possibilities first.

 

had the same issue. ended up doing the valve cover gasket, oil pan gasket & rear main seal all at the same time. no more leaks. i say do the valve cover gasket first if there is oil residue around the gasket area of the valve cover. if that doesn't fix it, do the oil pan gasket & rear main at the same time (i mean while you're down there you might as well replace the rear main instead of putting on a new oil pan gasket just to find out it was the rear main.......cause the oilpan gasket has a lot of bolts!!!). good luck!