In my opinion this looks like a lube circuit failure. It appears to have a lot of wear and galling. I would start by looking at the rear roller support and make sure the seals are doing there job and contacting the appropriate surfaces. Put the tail shaft back in with the output shaft and see what is happening between the bearings, seals and relief cuts in the shaft. At this point it may be a good idea to send compressed air through the lube supply and see if there are any undesirable leaks. Then I would work my way through the system and make sure the cooler is not clogged and maybe inspect the valve body.
AG.

Last edited by turbobitt; 06/16/16 09:08 AM.

1970 Challenger w/572 Hemi street car and my pride and joy. 1986 T-Type with 272 Stage 2 Buick V6 engine - True 8 second street car. Just updated the engine and put down 928 HP @ 35# boost to the ground on chasis dyno. 1976 Cee Bee Avenger Jet Boat - 460 Ford powered.