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Thanks Art454, I just checked the oil level in the mower gearbox by taking out the top(check plug) bolt. Clean oil started seeping out of the hole so it appears that no oil was lost from the gear box. The dealer is coming for the unit today and when I find out the exact cause I will post it...

Thanks for the response Kanook. Unfortunately it is not just soot; there is oil misting and it appears to be coming from the mowing deck; possibly one of the spindle shafts. It's under warranty, only 12 hours on the unit, and when I find out what's up I will post it hear. It wasn't working hard...

Hi, this is my first post. Two months ago I purchased a new BX2360 with the 60 inch mowing deck. I have a 3+ acre lawn and I bought it for this purpose only. It has now 12 hours on the engine. The dealer is coming to pick it up on Thursday under warranty but I thought I would post the situation...