Where did this ATF come from?

[87Skier]

I have/had an intermittent ATF leak in my 89 Suburban (350 with Turbo400 and NP241). The leak started in 4 wd when I noticed some smoke at low speeds. Got under there and ATF was everywhere. I couldn't find a particular source. It was on both drivelines, dripping from the skid plates, on the exhasut, everywhere.

Here is where it gets strange. The transmission and transfer case are full, I haven't added any fluid. But I did some work on the transfer case (swapped my cable driven speedometer for an electronic one, but changing out the tailshaft housing), and pulled almost 2 qts out the transfer case without cracking the drain plug.

So did some idiot really put way too much atf in the transfer case and by having it 4wd it was enough to push it out the vent?