2003 Ford Police Interceptor real wheel leak?

2003 ford police interceptor, 93, xxx miles. Driving and smelled a nasty burning smell. Checked out car. Checked transmission fluid, it was good. Checked oil, looked to be full, but it was sloppy on the dipstick. Looked at the passenger real wheel where smell came from, the whole wheel well was wet with what I think is oil. The whole tire was saturated with oil. Smelled really bad. Substance was black, and slippery. A knocking sound can be heard from that wheel when we're driving around 25+ mph. What's the problem?

Axle bearing and seal are blown. Hope you didn't destroy differential gears/bearings due to lack of lube. Inspect diff. And replace bearing and seal immediately.

Just like to add find the axle vent, make sure its clean and moves freely. Sometimes crud builds up and seals it, then the axle heats up and since it can't breathe it pushes oil out the seal. Also generally if its just wear, usually its the passenger side first.
its not easy to change the bearing out. The slide hammer pull method usually just gets you a broken bearing. I usually cut the outer race with a torch being careful not to cut the axle tube.

Leaking brake line. Not good. As a matter of fact flat out dangerous.