Thanks for the links MM. I was able to order a differential repair kit for about $35 with shipping. I've got some Loctite Superflex Red RTV gasket maker that I think should work ok, so I could get out of this fairly cheaply. Most threads and videos I've found on K46/T40 suggest using 5w50, so that'll be another $30 or so in oil. Altogether, not too bad if I can do it right.
To get me by I rolled the dice and got a used unit on ebay for $170. I drained the oil (which actually looked pretty good) and cleaned the magnet (which also looked pretty clean). I don't know if it was spruced up for sale, but it appeared to be in great shape. I put some fresh 5w50 in, purged the air with a drill, and slapped in it. So far so good! So if I can repair my old one I'll have a spare for my mower and my brother's (his LA115 also uses the T40). I can tow my aerator and dethatcher with slightly less stress, lol.