<VV> Wierd Differential adjustment.

[Smitty]

Smitty Says;  “background;  Goal was to replace PG tranny to diff seal because diff was filling with tranny fluid.  Decision was made to replace all rubber components in the diff along with that seal.  Diff adjustments were very loose (worn) but ring and pinion gears appeared excellent.  Bearings were seen as acceptable too so no parts were changed.  Just seals installed.  Great care was taken to insure that the sprag clutch shaft was completely bottomed out.  
Upon assembly even though the seals were pre lubed the pinion shaft showed over 40 inch pounds to rotate before pinion bearing preload was applied.  No preload on side bearings at this time.  After fruitless investigation of pinion shaft resistance I decided to set it up by feel.  I have done a bunch of diffs so I knew about what to feel for.  while turning the pinion shaft “preload free” the side nuts were adjusted until preload was felt.  No way could the correct preload of 3-4 notches be applied.  At this time backlash was right at .008 leaving little room for farther adjustment.  Pinion preload was gradually applied until it was felt while turning.  Gear backlash ended up at .008 but this was with side nuts jam tight against mechanical stops?????.  So what the hey is going on here?