Head gasket leak,Cherokees are known for this and the hood release was rusted and broken when I got it.
This is a great vehicle, the 4x4 is great and never got stuck so far and I do take it offroad almost every month,keep in mine that if offroad is your thing get auto tranny is more heavy duty than the 5spd and I can't tell you how many guys burn there clutches while offroading,driving in the snow is no problem.
The 4.0L 6 cylinder is plenty of power for on and offroad very reliable engine and bullet proof,they all leak oil and the headers will crack, but this is a known problem in the Jeep community.
Seats and not perfect and aftermarket seat's will be my choice,they are noise after a few years and wires inside will bend flat.
Over all the best 4x4 I ever own so far.
With 220,000+ miles on my 1996 Cherokee 4.0 it has neither a oil leak, head gasket problem or a cracked header. They don't "all" do it.
Glad to hear you love your Cherokee!
Yes, they are great.
My 1996 Cherokee Country with the 4.0 H.O. has never had an exhaust leak (but it was reported as a common problem for the main seal leak on 1994 and prior models) and she has no oil leaks. She has 170,000 miles and perfect compression. Runs like new and very dependable.
Only problem I am experiencing, (there is a TSB out about it), is when I have to get on the brakes hard the front propeller shaft will rub against the exhaust pipe due to old bushings in the lower control arm.
When you fix your exhaust leak... have you considered the Banks Torque Tube Header?
My manifold was cracked when I bought mine. It was cracked right near the collector. I had my neighbor weld it back up. Still leaks a little but it sure beats spending $200 for a replacement or trying to find one on ebay.