Probably a side seal. Strange, this is the first time I've heard of one going bad. It's easy to replace, I did both of mine when I put my hsld in. I think both of the side seals were around $25. But if you don't want to do it yourself, I'd go with Dousan's idea and get another unit, then replace the seal on your current one and then sell it. But if it was me, I'd get a REAL lsd swap the guts, and replace the seals.
