Looks like more rusty water than oil on the gears and the cross pin. I would hazard to guess the bearings are all shot.
Is there shiny particles in the fluid? Kind of look like glitter?
91 YJ, 350/700R4/231, 8.8/HPD30 with 3.73s, 6" SOA with 38" TSLs. If I ever see the previous owner again, I am going to curb stomp that meth-head brain dead crackpot.