We have a '74 2002 that has always had a leaky transmission. While under warranty, the rear output shaft seal, linkage seal, and back-up switch were replaced. None of these cured the problem. The mechanic said there wasn't much left to leak except the big gasket at the rear of the transmission and it didn't show any signs of leaking. I had heard that BMWs were constant leakers anyway, so for the time being I accepted this as one of the leaks I would have to live with.
The transmission always seemed wet at the rear as far up as the output shaft and always had a drip hanging on the drain plug which eventually found its way to the garage floor. When it came time to drain the transmission at 24,000 miles, I thought of one thing no one had tried yet. When putting the drain plug back in, put about 3 or 4 counterclockwise wraps of white plumbers teflon tape on the threads of the drain plug and presto! No more leak. She is as dry as a bone and clean as a whistle.
Author: Mark M. Hanna
Drain and filler plugs are a loose fit and the solution here will work. You may encounter a little extra effort in putting the plug back. Be careful! Don't go more turns than when you removed the Plug or you may damage some very expensive threads.Tech Ed
Author: Tech Ed