G'day fom a fellow Jackaroo owner.

Mine is a '97 3.2V6 and I haven't (yet) experienced this problem but I have noted several threads about it on various forums:

Some are listed at http://forum.australia4wd.com/index.php?showtopic=7667

From new I have always used Castrol engine oil - either GTX3 or Magnatec - so far OK.

I presume that you have experimented with oils?

Aussie 1997 3.2V6 SOHC 6VD1 Holden Jackaroo SE (Isuzu Trooper/Bighorn/Monterey) 5-speed manual, rear LSD, front Lokka (manual free-wheel hubs).