Chocolate looking rear end gear oil

I changed out the rear end oil on my Farmall M just a few months ago with new gear oil. Recently I noticed the PTO seal starting to leak.
During the repair I found the gear oil again looks like chocolate milk. This tractor does no work, just parades and shows and rides. Is this just condensation in the rear end or do I have a problem. I did the WHO tractor ride with no problem, no sounds or whines no performance issues whatsoever. Do I need to change it out again, or is it OK as is?

I would change it and let it drip dry . Now if you left it out in the rain or you wash the tractor the water is getting down in there thru the shifter and leaving it out in a rain man can it add water big time.

If you leave it out in the rain and snow melt, consider silicone around the bolt heads. This should keep water from entering the transmission.

TV and dave are spot on with the water issue. A lot of times, too, a seal will be prone to leak if it gets submerged by overfilling -- seals of the type on the PTO are made to hold back residual oil on a shaft, not to contain a body of oil. The over filling can be with water or by putting the specified quantity of new oil in after draining without cleaning the sludge out of the bottom.

The new oil could be picking up some of the sludge (if there was any) which would discolor it some, but the chocolate milk color is quite typical of water suspended/emulsified in the oil. There's no combustion back there to foul things and no other way for fluid to get in except by filling, condensation or water weeping into it, so I don't think you have any real problem as far as anything wrong.

What you might do is leave the tractor set to give any water that is more than what can be suspended in the oil a chance to settle to the bottom. Check your level first -- if anything runs out of the level plug, you know you're overfull. Then get a catch tub and just crack the drain plug and see what you get. If water, drain until you start to get oil and, if it was overfull, drain it further just until it's down to the right level, to where it stops overflowing out the check hole.

How much you get out after any water should guide you as to whether to replace or not. If you get a couple of gallons or more oil, TVs recommendation of draining and drip drying is definitely in order, not that changing out is ever a bad idea, just costly. If you get no clear water from the drain and only a quart or two of the milky oil, that would suggest that your oil is in better shape than it looks, leaving you a little more of a choice. Maybe you've seen some of the posts from guys who were working their tractor hard and wondered if it was normal for the deck/tranny cover to get remarkably hot -- it is when they're worked hard and that heat tends to evaporate out a lot of the moisture in the gear oil on a tractor that is worked regularly.

If you do drain and refill, try to gauge how much you get out. It will be an imprecise measurement, obviously. You can get a closer measure of how much it takes to refill. Fill just until it runs out the level hole. IIRC, Ms take something on the order of 13-15 gallons. Anything significantly less than the spec amount (from the manual) will give you an idea of how much sludge might be in there dirtying things up.

Couldn't hurt to try sealing around the deck bolts as dave suggested. Other folks go so far as to put a bucket or rig a small collar over the shift lever to shed falling water that might get in around the shifter. That leaves just condensation, and periodically driving the tractor enough to warm the rear-end up will keep that somewhat in check.

Wow Scotty, that was exactly what I needed to know! Thanks to you and everyone who answered my question