2001 XJ 4wd Sport. I had to pull the short axle to replaced crossthreaded lugstuds. When I put all back together, I noticed that a small amount to diff fluid was leaking onto the knuckle. Is safe to assume that the inner axle seal in shot?

 

The seals are fragile, if you hack it up with the axle splines, then it's goodbye.

 

To help avoid such events in the future, apply a thin coating of grease to the shaft splines and seal seat before installing.

 

Give it a good wipe up 99 percent of the time there undamaged just oil that got past seal during process.