I have a 1995.5 Tacoma XtraCab 6cyl with a 4sp Auto Tranny, and auto
locking hubs.

I've been doing a tune-up on the truck now that I bought my wife a new
Camry.

Here is my dilemma.  I drained the tranny (just removed the drain
plug) and this drained what seems to be over a gallon of fluid. Ok, so
far I wasn't worried.  But then I re-read my owners manual and it said
I only needed to use 2 quarts of Dexron-II (actually using Dexron-III)
to drain and refill the tranny.  Uhm, ok....

I added the two quarts, and then checked the level (cold at this point
of course). It only came up half way between the end of the stick and
the first "cold" notch.  I then ended up putting in two more quarts,
and it looks like I am still "1/3" quart away from the bottom cold
notch.

What gives here?

Also, what kind of fluid and how much, should I be using in this
trucks transfer case?

Thanks in advance!

Tom