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My Case 85xt Skid Steer has a hydraulic leak somewhere but the engine area is covered in oil sludge so I can't tell where it is coming from. Is it safe to use de-greaser and or water around the engine compartment?

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I'm not familiar with your piece of equipment, but in general, yes it's okay to clean an engine compartment. Just don't use an inflammable degreaser. I like Krud Kutter or Simple Green at full concentration. Let it sit a few minutes then spray it down with a hose. Keep in mind afterwards you might want to spray some clean oil wherever there are moving parts or things that might rust, since you'll be cleaning all of the 'natural' lubricant/protection away.

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Are there precautions to be taken around electrical equipment? Soaking the alternator, for example, sounds like asking for trouble to me. –  Josh Caswell Jun 20 '13 at 19:07
    
I would avoid spraying degreasers or water directly into the alternator, and try to avoid hitting it much at all, but in general engine compartments are expected to get some water even in normal driving usage (e.g. splashing up from the road in heavy rain, driving through large puddles and mild flooding, etc.) so I would not worry about it too much. –  R.. Jun 20 '13 at 19:39
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