94 z28 5.7l LT1 not sure what trans but its an auto.I removed the drive shaft thinking I need to move the trans back and change the flex plate but turns out the starter was is the issue. So I have to replace that. When I removed the drive shaft I knew some fluid would come out but not a whole lot.

Seems quite a bit came out. Would that mean my rear seal is bad?

 

No, it means you took the driveshaft out and now there is nothing to keep the fluid from coming out.