Yes, that hose is the breather for the differential. That tube that it goes to on the frame is open on the sides.
I don't think it had been filled through the breather hole, when I removed the fill plug the level was were it's supposed to be, just to the bottom of the fill hole. And It's possible that this was still the original oil, manual sasy to replace at 40k miles, when I got the truck it had 20k.
Also, there's no water or any other obvious crap. Other than the color, it appears fairly clean (no residues or particles in it).
I also filled it through the fill hole to the bottom of the hole (although the back is slightly raised to compensate for the driveway not being leveled), so I didn't think I was overfilling it. The reason I'm questioning it is because the service manual says the capacity is 44 oz and mine took close to 60 oz, that's a big difference. Maybe the information on the manual is off? Wondering if anyone had a similar experience.
On second gen Ram 50's the OEM fuel filter is mounted on a clip right next to the gas tank. Very hard to reach so that's probably why most install one in the engine compartment later. Here is the diagram from the service manual, filter is #15
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