Sounds like the input seal is blown. This is rather common on older trannies. It can be replaced without tearing down the trans. The only hard part is pulling out the transmission. Once the tranny is out, cleanout the bellhousing with brake cleaner or something so nothing will get into the tranny when you pull the input cover( the part the clutch release bearing slides on). Pull the seal out of the back of the input cover and install the new one, be sure the back of the seal is facing the side that goes back on the tranny. Then polish the input shaft where the seal sits with a scotch brite pad, if the groove form the old seal is to deep(if you can catch your fingernail on it), hit it with some 400 grit sand paper to smooth it out. Check the clutch while the tranny is out. A good rule of thumb is if its more that 60% worn to replace it unless you like pulling out the tranny. You might need to replace it any way if it got soaked in gear oil. Be sure to replace the pilot and release bearing.
