Oily transmission drum brake, transfer case drain mod.

When taking out my gearbox/transfer box to rebuild the gearbox I saw that the transmission drum brake was swimming in oil, presumably coming from the transfer case.

A friend of mine mentioned a common mod where a drain hole is drilled into the rear of the casing, I'm looking for more information on this please?

Won’t all the gear oil leak out

Best replace seal

Two places the oil can come from. The flange seal itself and it has to have a good land on said flange for it to seal. And oil can come down the splines. Here a felt/rubber washer fits behind the big nut/washer.
No Mod needed. On the same bolts that hold brake backplate on is a pressed metal oil catcher [has a gasket]
At the bottom of the alloy casting behind backplate there is a slot that allows any oil that gets into the drum to escape. Make sure it is clear. It is meant to deal with small amounts, if seal gone it needs changing.

Changing seals is a rite of passage on a series.