The 4.2L has a 2-piece rear main seal. It doesn't require dropping the trans to replace, although you do have to drop the oil pan and remove a couple main journal bearing caps to do the replacement.
If that indeed is the oil leak. The 1st place I would check is the back side of the valve cover. I replaced my rear main thinking that was my oil leak only to find out that after I did the replacement the leak was still there. Turned out to be the rear of the valve cover gasket that was the culprit. But a rear main is a common seal to fail on the 4.2L as well.
Usually starts leaking after a bad PCV valve. The 4.2L is noted for having high crank case pressure, and if the PCV valve starts to clog or goes bad, it will almost instantly take out either the rear main or the valve cover gasket, and when it gets real bad you will see oil spew out of the dip stick tube as well as where the distributor meets the block.
'87 YJ, 4.2L built and bored, 8.5" of lift, 8.8 rear, AX15/NP 231, Tom Woods drive shafts, Flat fenders, 12,000LB winch, Custom bumpers, Rattle can paint job. Never completed...