The pinion seal leaking is pretty common and can be due to one or two things. Regardless of the cause - for the second, either the metal has worn off the shaft or the material has worn off the lip of the seal. Or both. Causes?
Well, yes it can be the battering that Rodger mentioned, but it can also be lack of oil leading to a dry seal or excessive sand and dirt getting in past the dust shield slowly grinding things down. But it can also be due to wear in the outer pinion bearing. The inner bearing is a pretty huge affair but the outer isn't so big. If for any reason the pre load begins to reduce on the pinion (wear, no oil, brutal treatment) not only can the end float increase (the in and out movement) but also the bearing can effectively 'weather-vane' around in the bearing race. OK we're talking thou here but the seal is designed to have the shaft spinning centrally in it.
As the seal ages and hardens, that 'gyro' movement of the shaft will cause it to leak. I'm no expert on the 100 series front diff as it's a clamshell type but the principle is the same in terms of preloading the pinion. Whilst you should be able to rotate the flange back and forth about 5 mins on a clock face, there should be absolutely no up and down, side to side or in and out movement. If there is then your pinion really needs resetting. If not, then the seal can be hooked out and a new one driven in, resetting the pinion nut back to where it was originally staked.