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Hello everyone. I was working on my bike and replaced the output shaft seal and still noticed I had a leak but I don’t believe the seal was leaking. Could the case possibly be cracked in those areas where the arrows are pointed? There seams to be oil in those rings.

I'm not a KDX guru (beginner actually), but I have wrenched on my fair share of stuff. Usually aluminum will look 'cracked' and not be (from the casting process), I don't even see anything like that in your pictures. So my from afar guess is that no, it's not cracked.
What can cause the leak still is a few things.
1) the output shaft having a slight 'wear groove' in it from the previous seal (did you notice anything like that?)
2) a small piece of dirt getting under the seal during install
3) catching the seal on a sharp edge of the shaft (splines/etc) and getting a small tear in the new seal
4) most seals work best/better being lubricated (with oil) prior to being slid over the output shaft. Installing it dry could create a situation of a small tear before oil gets to the rubber/metal joint

Oil being in the spot where the left arrow is, is probably oil coming from the seal area and being flung there. Also, are you actually loosing transmission fluid? What do you lube your chain with? could it be that?

You could clean the area really well (you may have already done this), let the bike sit without running and see if oil is 'weeping' out into those areas. We would check for cracks in helicopter blades by putting a little rubbing alcohol in the area of the suspected crack, then wiping it with a paper towel and see if more rubbing alcohol 'weeps' out of the crack after you wipe it. Now this is much easier to observe on a relatively flat and black helicopter blade. I'm not sure how effective or how exactly you could replicate that on a small and shiny area, but maybe?

Did you replace the o-rings behind the spacer? Lots of people forget them and it will cause a leak.

Also, I think if you do not have the sprocket on with the circlip, it will not push the collar against the o-ring(s) to cause it to seal.

Maybe it is old oil in those areas.

Look up casting flaws / casting lines / casting cracks.

As SS109 said, you have to replace both of the o-rings, and have the sprocket and circlip on for it to seal properly. The output shaft seal is just one of the six bits that make up that seal assembly. IME when you replace the seal you also replace the 2 o-rings, the collar, and the snap ring for best results. Any oil in the areas you circled was likely thrown from the output shaft (I am replacing mine this week as it has been functioning as a chain auto luber for the last several weeks lol). easy way to check is clean the area with carb cleaner thoroughly, get it nice and dry then dust it with talcum powder and come bak later and check it to see if it's still dry or not. I have to add that is one of the cleanest countershaft areas I've seen on a KDX motor, I'm a little embarrassed to look at mine now lol

Yes, do replace all of it at once. As he mentioned, it is a system.

Update I have not rode the bike since installing the new seal. As you can see the seal isn’t wet. I just don’t understand why oil would be located around that ring.

Could even be residue from a few drops of leaked fuel from the carburetor. Being premix, when the gasoline evaporates, the oil is left behind.

I wouldn't worry about it.

I'll reaffirm that yes, the seal,the spacer, and the 2 stacked o-rings behind the spacer sleeve all need replaced together, and it's of course best to use ORN, particularly on the two o-rings. Aftermarket have lesser quality control and sizing issues on the o-rings in particular, and they do occasionally leak vs OEM.

Be thankful Kawasaki has a superior design with two stacked o-rings vs KTM with only 1 o-ring, ala the KTM automatic chain oiler! My wife's KTM 200 XC-W goes through 1-2 sets of these seals/collars/o-rings once or twice a season... It's really common on ktm's I've learned from my buddies' KTM bikes and from reading online...