Solved. I used too much sealant

94 Toyota Pickup 2WD W55 Transmission.

Installed a LC Engineering Short Shift Kit.
Replaced Rubber Gasket
Used Toyota Orange 1281 Seal
Leaking from the Shift Tower / Spacer Block I noticed after a week of driving.
I Can’t really pin point because it hit the drive shaft and goes everywhere. This caused me to think the drive shaft seal is bad...but it was fine before I installed this.

I believe I used too much sealant between the plates and need some confirmation here.

When using the rubber gasket between the transmission and LCE spacer block do I also use the sealant? I did this, not sure if that was correct.

Should I avoid getting sealant in the screw holes?

I could not find a good video to explain this. The LCE instructions don’t cover the 2WD application well.

thanks for the help.
Toyota quoted $350 to re-seal this...

 

It's been a few years since I've installed mine but I remember watching a youtube video and doing the install. I found one for a first gen tacoma and it was basically the same install.
Looking at my shifter, it looks like I used RTV on top of the spacer and just the rubber gasket on the transmission. I dont think I put any RTV on the gasket and I know I kept it out of the bolt holes. I would recommend using black Right Stuff or the Toyota FIPG RTV.

 

Thanks for the reply. That's where I messed up. I removed the sealant from the bottom of the spacer and that seemed to have fixed the issue! I'm assuming I originally thought... "the more the better, right?!" That was wrong..ha!