That doesn't look real good, mate. That wheel hasn't been on there that long, really, and for the grease to break down completely like that, I'd say that it's not suited to the task.
Like there's no movement in that spline, it just slips over the male drive spline and just sits there and transmits the power to the wheel. Are all your bearings ok? I ask cos of the red hue in the area, as if something is moving around, or is that just plain, non metallic dust?
I'd try a change of lube to something like plain old wheel bearing grease and see how that goes.
Sorry Jonesey, you posted while I was typing.
Bryan, what Jonesey said!
