someone had really done a number on this thing. first the weird fluid that the diff didn't like, (chatter, slipping) the side to side lash was set completely wrong, they bent the axle bearing retainer plates, one lip seal was in backwards, a total mess. i am glad we took it apart. here, looks like someone used a dang wood chisel to get the lip seal out. i think that and the backward lip seal explained the leak.