Question:

Is this the inner or outer axle shaft where the conflict is? Sounds like it would be the outer..... and trying to visualize where the interference would be.... because once you slide the inner through the hole in the knuckle, which I have found can conflict, you usually are in the clear. I am thinking its like Crawler was talking about and the interference it somewhere where the outer shaft meets the spindle near the spindle seal.... or with the seal itself.... I would compare both spindle shafts.... you might need to go to a machine shop and have something modified on the new stub axle to get it back together.....
I would poke around in there and see where the interference was and find it and take it from there..... this is the fun of working on 40 year old vehicles..... on the other hand it doesnt take a computer to fix them either.....

 

Also, check the face of the stub axle, right were it meets the spindle in the knuckle.... it might be hitting the back of the spindle, or some part of the knuckle casting.... it could be tedious.... but you could put some cheap washers between the spindle and the knuckle and then see if the interference goes away.... and if it does have the spindle machined accordingly... Otherwise its interference with the knuckle, and the you can grind down yourself...

 

Thanks Boba I'm going to work on this today.

 

I looked it all over and decided to try the spacer idea, but instead is using washers, I found a piece of thin allumium an and cut and drilled it to fit behind where the hub mounts to the truck. It gave it the room it needed to turn the shaft with ease. Thanks for the info.