This is somewhat off topic (because it is featuring a truck axle) - but regardless check out this interesting video about what the differential oil looks like in action!

https://www.youtube.com/watch?v=9-yG3D3JBRs

I love stuff like this because there is so much false information out there in the car world, so I always appreciate the people who take a more rigorous approach to separate fact from fiction. You guys have any other similar videos to recommend?

I agree. The video was well done and very educational. Thanks for posting it!

Strikes me there's a fair amount of power used to shove that fluid around. I wonder if something on the order of a dry-sump setup might gain noticeable power?

--DD

Then you would still loose power driving the suction and pressure stages of the pump, introduce more moving parts and possible leakage points. In the end it would probably at best be a status quo.