Sounds like you need a new shift shaft seal on your transmission. I know that Snap-On used to make an installer/removal tool for it as I have one I've never used. It can be done without the tools.
Very carefully drill a small hole in each side of the seal and screw in a small sheet metal screw in both holes, not to far. Then use a couple screwdrivers to pry up on the screws to pry the seal out. Installing the seal is as easy as finding a deep socket that fits over the shift shaft and tapping the seal in place.
