is this on your lsx? i had a similar problem , the rear cover uses a small o ring and im not sure where mine was coming from but i know it was engine oil from the same area , never did find it hopefully it wont be there this go but imo it was something with the rear cover on the lsx block.

Yes, this is my LSX block.

Here's a better shot of the seal lip which is mostly dry.

http://i114.photobucket.com/albums/n.../IMG_3725b.jpg

The bellhousing is dry and unstained on the outside, but this looks like/feels like Dexcool:

http://i114.photobucket.com/albums/n...4/IMG_3738.jpg

We sure it's not just a block porosity issue? I mean it is all aluminium and I know there has been a TSB out on other LS blocks for this.

LSX block is iron.

The plug was in tight with lots of what appears to be teflon paste sealant. Didn't see any coolant oozing out until I got it about 3/4 of the way out?? No o-ring or aluminum washer on these plugs.

headgasket pushing water possibly? really need to determine the type of fluid it is before any further diagnosis can be performed , taste it imo

It was definitely fresh Dexcool on that plug. When I loosened the plug enough it started to dribble out along the same path as the reddish stains seen in the first photos I posted. Doesn't appear that anything was leaking from above the bellhousing.

check for hydrocarbon , or pressure check the system , should find the source of the dribble

So you're thinking that the plug is the leak? Should be an easy fix...

Looks that way. Not sure why it would leak though as it was tight and had plenty of teflon goop on it.

Could be some debris or oil/fluid on the threads not allowing the teflon goop to do it's job :shrug: