Transmission fluid dumping in engind compartment

Well reading the posts I'm a bit confused on this one. There is a pressure release hose on the passenger side firewall next to the heater blower fan with little plastic cap. The only pressure release hose I've read about is for the vaccuum moculator that goes to the transfer case to actuate the 4wd. This hose at highway speeds 60 to 70 MPH dumps transmission fluid on the coil, spark plug wires and exhaust manafold. Needless to say it billows white smoke as if it's on fire. I had a 10 quart trasnsmission fluid exchange and I changed the transmission filter and that seems to have helped a little but it still does it.
Yes the 4WD has the problem of not engaging and disengaging (even after it's turned off) but I rarelyt use the 4WD so that's no big deal and I suspect major problems with the 4WD anyway. It's the first 4WD I've owned so I'm not very educated in that area. When it's put in 4WD it whines for a second or two before engaging, when it engages. What makes me think it has major problems is that when I was going up my steep hill driveway in 4WD the passenger tires were on concrete and didn't move while the drivers side tires were on muddy ground and spun. Is that normal?
Thanks
Ed

If tranny fluid is comming out of vent hose on firewall the transfercase is over full. Look at the back of T-case for the filler bolt-plugg.When you remove it I will bet fluid will dump out. The cause is a gasket between the tranny and the transfercase is leaking.

Was you tranny fluid low befor the fluid exchange?
keep an eye on it.

About the 4wd, if the 4wd isnt use alot the hub-vaccume-switch likes to start sticking.Ive had mine act like you discribed and have replaced it may times.
check this out WWW.s104x4.com click on tech articles for vaccume diagrams.
Going up hill with one side in mud and the other on concrete I would think it will just spin out.If you want to do a check on front diff engagement put it in 4wd then jack both front tires up, put it in nutral,turn one tire by hand and see if the other tire turns.If so both hubs are locking.should be ok
Post what you find out..

The transmission fluid was fine when it was changed, however I do have to keep an eye on it now because it does get low. It dumps a lot of fluid in the engine compartment when it does this. Sounds like the seal might be a posible. Would you happen to know if it's a rubber seal or a fiber seal? I have an additive that claims it will seal almost any rubber seal and is safe for transmissions. Thanks for the reply.

Not sure what type of gasket is used.Ill post back if I can find out.