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I posted here before with my 4wd not working and was helped tremendously with bypassing the computer with a switch. Still works like a charm. Hoping for help with a new issue.

I have a 1991 Legacy L, automatic which has recently begun to smoke coming from somewhere under the hood. I can see it coming through the grill at night and it does smell. It is worse when the engine is under pressure. When I got stuck in the snow, there were drops of yellow fluid on the ground. It wasnt motor oil, power steering fluid or radiator fluid. I checked the transmission dipstick and it was that color yellow. I didnt know tranny fluid was yellow. I think it is dripping on the exhaust causing the smoke. Also, there is a squeeking sound which you can only hear when car is idle. It sounds just like the power steering pump when the bearings start to go. Not a constant squeek, its with the revolution of the motor, several times per second. Its intermittent but getting worse. Goes away when the engines gets to a higher rpm.
Question is, is there some sort of bearing that is tied in with the transmission and if so, is it an easy fix? I ask because it is an old car and am considering either fixing it or looking for a new one.

The automatic transmissions have a separate transfer case for the front diff. This has gear oil in it. The main transmission has auto tranny fluid, which is red.

Check your level in both the AT, and for the front diff. Make sure both are good. Sometimes seals go between cases and you can get ATF in the gear oil.

It may be something as simple as a gasket on the drain pain or possibly seals on the axle stubs. Unfortunately, without going under the car, it's kind of a guessing game. If you look under the car, you should be able to see where it's coming from, and how bad the leak is.

For reference sake, here's your other thread which identifies the exact cause.

http://bbs.legacycentral.org/viewtopic.php?t=39319


Also, you didn't need to start a new thread.