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You are likely seeing auto trans fluid. It is often used as a substitute for power steering fluid. You say it's leaking badly so someone probably got tired of paying for power steering fluid and switched to the much cheaper ATF.
I would try replacing the fluid disconnect line crank engine and keep adding fluid till it runs clean. Use the right fluid my manual for my car say's ATF+4. If you put in the wrong fluid like regular power steering fluid you will burn out the pump in a few minutes. Your calls for Chrysler PS fluid.http://youtu.be/8mRa95CWoNQ Watch this
i would remove the power steering cap, and look inside of the pump, and take the end of a screwdriver, and dip it into the pump, and bring it out and look at the color of the fluid, if it is clear, then it has power steering fluid, if it has a reddish looking color, then it is atf + 4 fluid, also , you can look into the owners manual of your vehicle, if you have the manual.
1. Power steering fluid DOES need changing because it deteriorates with time and use.
2. You use exactly the fluid type and spec which is specified in the owner's manual . The type of PS fluid to be used depends on the type of PS system fitted to your particular car. These systems can be and are changed during a model run .
3. The fluid you have in the car is red because it is Automatic Transmission Fluid (ATF). Only use the type of ATF specified in the manual. For example if it states use ATF Dexron III or if it states Mobil ATF 3309 or another type only use that spec ATF. (I believe you will have Dexron III product in the car now and it will be the non-synthetic type).
4. You can refresh the PS fluid over time yourself by sucking out some fluid from the reservoir and adding fresh fluid. It is easy to pump out fluid using the pump fitting removed from a plastic trigger spray bottle. Just unscrew the spray nozzle from the tip of the trigger unit before you use it to pump out fluid. Remove and add fluid to the reservoir 5 or 6 times or more over a couple of weeks and you will eventually renew most of the PS fluid. Do not remove fluid once it drops to the level of the top of the top hose connected to the reservoir and then just top up each time to the correct level in the reservoir. It's really that easy.
Your owner's manual lists the correct fluid. Sometimes it is listed on the P/S fill cap. If you remove all the fluid then use ATF+4 fluid. If you are only topping it off then use ATF+3. This is the same fluid that you use in the Automatic Transmission of your Neon.