For detailed vehicle background, see: new member thread.

Brief history: it's a 69, been in the fire service (and therefore garaged) since sometime in the 70s, and I recently purchased it at public auction, with 17.5K miles...

Last week I changed the engine and front axle fluids and today I decided to do the rear axle, transmission, and transfer case. Rear axle-- nothing unexpected. Transmission and transfer case, on the other hand, well, see for yourself:





I only got pictures of the transfer case sparkles, but the transmission was similar. My best guess is copper?? But, why would there be copper in my transfer case? Transmission I can see from synchros maybe, but... okay so I don't know that much about the innards of these things, but I didn't think it was good for this stuff to be in the fluid. There was nothing tangible in the oil-- it was smooth and felt good, but you couldn't miss the sparkles. My hope is that there's some obscure additive that someone would have put in that would make it look like this? I know I'm stretching it...

So, my questions are: 1) What do you think this stuff is, and 2) How bad do you think it is?