Smell gear lube after using 4wd

Hey guys, I have a friend who owns a 2000 Montero Sport, 3.0, automatic, etc. He's asked me for awhile now to see what's up with his 4wd, and today I got to experience it firsthand. After getting over his muddy, rutted, steep-as-crap driveway(in 4wd), I hopped out and picked up a real strong smell of gear lube, mainly from the front end. Now I'm no expert at all on import 4wds, but the only thing I could think of is the front diff chunk venting/leaking somehow? No smell at all from the back, and if I'm not mistooken the transfer case uses transmission fluid, right? Any idea why it's doing this?

Thanks in advance, guys.

Monteros get no love anymore?