Think I Need a New Diff

Remember that the rotation you see at the pinion is all the lash in all the gears added together. The r/p backlash is measured at the ring, so the movement at the pinion will be more. 1/8" to a 1/4" of axial play at the pinion is pretty normal. I would be more worried about having less movement actually.

Side to side play at the pinion is definitely not good. There should not be anything moving that way.

 

Look for metal flakes and chunks on the drain plug magnet when you drain it. Some "fuzz" or very fine particles are perfectly normal, but you don't want to find any larger pieces.

 

Run anything but Royal Purple. It is a terrible product.
I'm a big fan of Amsoil, but you can't go wrong with Valvoline.

 

So I did a gear lube change and found a few small metal frags nothing scarry and the usuall shavings. There was a small amount of water in the lube, but not bad. It is noticably quiet er but is still there. Im gonna just give it some time and see, but I probabbly will be looking for a deal for an ARB.