After driving our 98 Outback for a few miles and the engine has warmed up I can smell a slight "hot" smell when I stop in the garage. The smell cannot be detected in the cabin interior. I checked all fluid levels and they are fine. Brake fluid is clear. Power steering and auto tranny fluid are nicely pink and the oil is full and clear. The radiator overflow is full as is the radiator itself--checked when cold. There are no fluid leaks that show up on the garage floor.
The one thing I did notice under the hood was the passenger side output shaft appears to be coated in sludge. The boot is clean and the shaft is clean from the boot to the wheel but from the engine to the boot it is pretty oiled up. The driver's side shaft is completely clean...I can see the color turquoise...while the same color part on the passenger side is covered in sludge. It's not viscuous enough to drip on the floor but a finger touched to it comes back with sludge.
Is this perhaps what I'm smelling? Does that shaft get hot enough to slightly cook the sludge there and cause the smell? Also, does this sludge indicate a part that has failed? Perhaps a seal out of the engine or something similar? Is this a red alert thing to fix immediately or more like an annoyance? Thanks for all input!
I should add that the engine doesn't overheat. The temp sensor doesn't quite go up to halfway when warmed up and then stays there like glue. The fans don't come on very often at all and the fuse for them is fine.