My DII has a snorkel, and both axles and both gearboxes have extended breathers which run up the snorkel.
Twice now I've had the front axle dump a sludge of emulsified oil out of the breather at the top of the snorkel. I'm pretty sure what's happening is the diff temp is getting to 100deg on long runs, the water is boiling off, and a vapour/oil mixture is coming out of the breather. What it leaves behind in the axle is mostly oil with a bit of water here and there. (In this respect, it's a good thing, because it's sort of self-rectifying!)
The first time it happened was on the way back from Iceland, where I'd been wading a lot. However, the second time, I hadn't been doing even moderate wading for some time beforehand.
My garage said they find this happens a lot with Disco IIs, even ones which have never done any more serious wading than a puddle outside Sainsburys.
Any ideas why the water is getting in, where it's getting in, and why the oil doesn't all leak out the same place the water is getting in? The axle never loses any oil; if anything, the level is usually higher than the filler level, because of the extra water that's in there!
I can't be sure, but judging by the state of the side of the car after it boils off, it looks like at least half a litre of water getting in, if not more. The oil in the rear axle is always pristine.