Water in any of the housings is common in old tractors. While it can be from sitting outside it is not usually the cause. Moisture gets into the housing from the humidity in the air, and the next night it condenses on the inside walls. When the tractor was working everyday the heat generated would drive the moisture out every day. Your tractor had old type oil without the modern additives so it stayed separated for the most part, which is why it was easy to drain off. The small amount that you have left won't cause a problem, but if you really want to clean it up good find some hard work for it. If you put cheap hydraulic oil back in you will be able to drain most of it out easily again. If you put in modern UTF it will mix as yours is now, and you will need to drain all of it annually.
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Today's Featured Article - Women and Tractors - More Views From the Farmer's Wife - by Teri Burkholder. The top ten reasons why the judges wouldn't let you participate in the stock antique tractor pull: Hey, this is stock! It came with that V8 in it! That "R" on my tires stands for "really old" not radial! Blue gas? We thought it was a pretty color! What wire hooked to my throttle?
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