Your description does not make it clear where the leak is from. There are three possibilities.
1. Drive flange. This will leak from either under the hub cap or the gasket under the drive flange. Replacement of gasket or the O-ring on the hub cap is simple. Leaking flange gasket may indicate loose wheel bearings though, so check this.
2. Inner hub seal. This will leak into the brake and thence onto the inside of the tyre. Replacing the seal is a remove hub job, but pretty easy, but if the running surface on the stub axle is scored may need the seal ring replacing (late S3 needs the whole stub axle replacing). Again, loose wheel bearings will cause this. Special tool - wheel bearing nut spanner.
3. Swivel seal. I think this is most likely from your description. Replacing the swivel oil may have caused this if there was none in there to start with, or if semi-liquid grease (also called "one-shot") has been replaced with ordinary oil. Replacing the seal is a fairly big job, but pretty straightforward if you have a manual. Contributors to leaking here include damaged ball housing, and loose swivel bearings. Consider replacing swivel bearings and bushes when doing it. As a short cut, there are available split swivel seals that are flexible enough to install with no further disassembly, and if done with care and everything else in shape, they do work, although not as long lasting. Done this way, and easy job.
Hope this helps,
John
John
JDNSW
1986 110 County 3.9 diesel
1970 2a 109 2.25 petrol
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