[JimMoore]

Slave cylinders fail with some regularity. However, I'm not sure you are looking a a failed slave cylinder there. That looks more like a leaking transmission seal. is that brake fluid or tranny oil in that cavity? Pop open your clutch master cylinder. Is the fluid contaminated? If not, I think you slave may be OK. the throwout bearing usually is the first thing to go in the slave cylinder. It will usually be cocked to the side if it is bad, and the ball bearings will fall out. From the pic, yours look OK.