Pull the gearbox drain plug and inspect it for the same sludge. While the sump is off pull and clean the pump one way ball valve. The debris sounds like it is more likely from the gearbox rather than the OD unit. But any additional guidance/suggestions would be greatly appreciated. I assume I might test the solenoid as per Paul's instructions for the D type unit. I am seeking advice on my next steps here. I found about 1/8 inch of a greyish-silver paste like material ( like a thick paint or toothpaste) as well as a sprinkling of silver flakes (which may have come from the transmission). Worrisome is the debris found in the OD sump. I also reinspected the relief and pump body assemblies as per a John Twist video.
The OD worked fine for several years - engaged within several seconds, did not slip and disengaged quickly. I replaced the seal, cleaned the relief valve and pump body assemblies and checked the electrics. The rear oil seal was leaking leaving the unit and transmission with little oil. The unit was non functional when I bought the car. MG MGB Technical - Laycock overdrive I have a later Laycock OD out of a 76 roadster that stopped working recently.
