I have a 87 700R4 with 44,000 on it, put in a shift kit, new gaskets and use a 2,000 stall converter. Everything was cool, until I noticed that it is putting fluid through where the dipstick O-ring goes into the transmission. Is it as easy as replacing the rubber O-ring, or do I have too much pressure building up in the transmission, and it's making fluid flow out of that area?



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87 IROC z
5.7L TPI 350
TOO MANY MODS TO LIST

"Pardon my noise, its the sound of freedom..."

 

This is a common area for leaks. you shouldn'd have an o-ring on the dipstick it should have a sort of funnel shaped seal, the seals are available at autozone and others. If the dipstick tube has a groove around the end it is the wrong one, a 700R4 tube should taper down at the end. Old turbo350 tubes used o-rings.
I would jack the car up high on the passenger side so the fluid moves away from the hole, clean everything with a rag damp with brake cleaner, apply a small amount of silicone sealer, this will seal it and lubricate it for installation, make sure the tube goes in straight or it will rip the new seal.