1995 Cherokee Sport, I6 Manual

Noticed some slight blue/white smoke coming from Catalytic Converter after driving short distances. Checked underneath and found fluid leaking down onto the Cat and burning on the hot surface.

Checked brake fluid, coolant, engine oil all seem to be at good levels with little change over the last few days.

Oil pressure is steady between 45-60 and Engine temp seems normal as per gauges.

Saw this under the body and assuming it's a part of the rear brake lines (please confirm). It looks as like the boot or rubber seal tore a little and this is what I think the source of the leak is. It appears to be dripping fluid down towards drivers side and passenger side onto he Catalytic Converter. It doesn't smell and looks like Oil but I'm confused as to why Oil would be coming out of a component of the brake system. Checked further up the Jeep and no visible signs of leak off engine, oil pan, or transmission.

 

Another possibility I just thought of was that fluid is leaking from the back end of the Transfer Case and creating the leak pattern shown in the picture...

 

So I've ID'd the part as the emergency brake cable from pics online...kind of what I assumed. But that's a straight cable setup to the emergency brake handle still scratching my head as to why oil, or any fluid, would be leaking from there. Is it likely that fluid is leaking from the rear seal on my transfer case and being thrown up against the body as shown in the pictures?

 

looks like the xfer case output shaft seal. mine leaked creating the same white smoke and horrid smell. you need to check the vent and make sure it's not clogged and I would swap the seal on the output shaft, too.

 

Took it back to the mechanic who installed the transfer case and they put in a new seal, still smoking a little though. How do I check the vent for clogs?

 

Got to get it to where you can check that the hose is clear and the valve is working.. One way would be to pull the hose down from the engine bay. Remove the valve and check it. Then remove the fill plug on the t/c and blow through the hose. You should hear air entering the t/c. Or remove the hose completely and check it.

 

Is there a write up for that?