I had the rear end rebuilt and it started making a lot of noise. I took it apart and it looks like the pinion ground against the limited slip housing. I don't see how this happened. Can someone give me an explanation for what happened? I already replaced the rear with a used one and the rebuild only had 12k miles on it.

 

Is the pinion loose ?? The only way the pinion will move back like that is either the nut came loose or a bearing gave it up...And don't run it like that until you get this sorted out...
EDIT: As I'm looking at the pic it appears the carrier caps might be moving{shiney areas behind the carrier caps} ... Pry on the carrier and see if it moves... And you did back the cross bar pin out.. correct ??

 

Someone didn't tighten the pinion correctly, cross pin is loose also.

 

I backed the crossbar pin out to remove the axles. I knew I was going to take out and put the axles in more than once so I just left it slightly in. Pinion feels snug, but I didn't pry on it though. I'll check on the bearing caps though, It's hard to tell in the photo if they are shiny.

I'll try to play with it more tomorrow to see if it moves at all when pried on.

 

did you run a pattern check and measure backlash before taking apart ?

If it is not too late do that now

what does the pinion flange feel like ?

obvious questions i know, and you are still going to have to take it apart