I also pulled the top u joint out on the rear driveshaft and the bearings in the one cup were dust... Looks like I'll be getting new u joints as well

 

Well grinder kicked back while cutting out the seized u joint and now I've been sitting in the hospital for four hours waiting for stitches, good start to the week lol

 

Well that sucks. Now you have to work with an injury

 

Yes stupid me, I should've been wearing gloves , turns out I cut right through the tendon on the back of my thumb and had to have minor surgery and will be in a hard cast for at least a week, lots of time to get the parts I need I guess

 

Aww that sucks, hope you heal up good as new.

As for the rear diff-- take this for what it's worth:
First off this is for the 10.25 rear, not sure if yours is the same, but I walked into a driveshaft shop after hours and got the grumpy old guy that knows more about these old axles than I know about anything, haha. He talked about he crush sleeve and how there was a cool mod to get rid of it because eventually they all loosen up, however his advice was to torque it back up and run it, as most commonly that works just fine.
But the spec is 500 ft/lbs, gotta get a 5ft long bar and stand on it(if you're around 200lbs like me).
Edit: my math sucked last night, should be 100lbs on the end of a 5ft bar. Or stand on a 2.5ft breaker bar, etc.

That was around 3-4 years ago and some 30k. No issues that I know of. I run Schaefer synthetic gear oil too which may help.
The big thing he said that loosened it up, and how I discovered it, was the rearmost U joint pooping out on me. Didn't get after the joint fast enough.
I also tow a 4k trailer with my pickup for around half the miles it drives.

 

When I was 12 I cut my MCL in my left knee with a 9" body grinder.

-Enjoy
fh : )_~

 

Having recently done this mod, I have a couple of things to say:
First, the main reason to do the crush sleeve eliminator or replace the crush sleeve is to keep the pinion to ring gear pattern meshing tightly. If you tighten the crush sleeve down too much(as you would do when you effectively "re-use" the old one), you end up with more slop between the two gears.
There are supposed to be reasons why you have to have things tight etc, or else your gear wear will be all off etc... but the main reason in my mind is that if you have too much clearance, you will have a clunk between accelerating and decelerating, just due to the slop.

I ended up using a crush sleeve eliminator(effectively a pack of shims) and a set of shims for the carrier to tighten up the gear pattern on my truck. I reduced the clearance quite a lot, and probably did something wrong in doing so... but as it isn't getting hot while driving, and has less clunking than before, I guess it worked.

 

5 ft bar x200 lbs=1000 ft lbs.

 

Thanks bashby! My bad. Post edited. Got too much to do to be doing math at night, haha.

 

While I agree with all that, and would rather have fixed it correctly, at the time $300-400 vs tightening a nut was a big difference for me financially.
And talking about the clunk/slop, most of it that I had was eliminated by re-torqueing the nut.
They key(as understand it), is to NOT "re-crush" the sleeve. Since the factory spec was 500-600ft/lbs, going to the lowest good spec was what he suggested to achieve all that.
Unlike you I was way too timid to tear open my diff, having heard of such a high failure rate and not owning a dial caliper nor knowing anyone locally that's done them before for help.
Hope yours works great for a long time!