I don't do alot of ring and pinion set up. But I've never seen one that clears the entire tooth on drive and coast. Preload is correct. .008" back lash, .033" pinion shim. Original shim was under the pinion head bearing race. It was ".031. It's 9 case 8 3/4. Also odd is that the crush sleeve eliminator came with about .060" worth of shims. It needed .088" to get to 25in/lb of pinion preload. I double checked the pinion races to be set flush. No burrs underneath. This is a new factory 2.76. Timken bearings.
Doug