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Apparently the 1997 Tahoe has a problem sometimes with servicing the driver-side front 4x4 axle seals. Mine was leaking too, so I had the shop look at it finally when I had it in for some other repairs.
The problem is that with regular use, over time, the clip that holds the axle in the diff deforms and doesn't actually release the axle like it should. They told me that if it doesn't pop out (which it didn''t) that the only way to get it out was to cut something (either the shaft or the case, I forget which) with a torch of which, the replacement cost was around $1200.
So, if it is leaking, try to pop it out. If it doesn't come out, just put it back together and "faa-getta-baat-it."
Good luck!
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