Conclusion:

Massively seize diff/pinion bearing on diff shaft, the bearing brace even
turned into the housing. My transmission guy told me that this diff had
suffer way before I put that tranny in. Whatever, we have rebuilt the diff
completely today with another one and new seals and bearing.

Transmission is back in the van, i'm back from a test drive, all is fine.

This family can safely go home now

I have decided to not charge the customer. I just want him to pay my
transmission guy... and he won't charge much.

Ben
http://www.benplace.com/