Just talked to dealer. Since the diff is not leaking fluid, the seals are good. He told me to check the breather hose coming out of the diff. He said this is not uncommon. He said to mix 1/2 kerosene and diff fluid and run it, then drain it. Do this 3 times and it should be clear.
He said the breaker hose may have come off or it is not long enough. I do not run in deep water.
Will post my findings...