ok ill try that... the diff was second hand. didnt pay anything for it, so im not fussed if its rooted. the previous owner did mention something about "needs to be re-shimmed" whatever that meant.

its goes perfect in a straight line, which would rule out the axels not sitting in properly - wouldnt it?

so the noises/problem are definitely internal?

I asssume by "re shimmed" they meant the clutch plates had wear and needed replacement thicker plates, to get the clutch pack pressure up.

In a straight line the clutch pack plates would not be turning relative to each other so no noise would be generated. I am thinking that when turning the noise of the plates is transferred through the axles to the diff housing due to the load on the axle from retaining clips from not being seated?

Apart from that I cant guess what the problem would be.
Penrite's LSD brew is good oil, I still always use GM diff fiix with it.

ok i dumped the oil... still very clean. i poped the axels out, and they were fine, and seated very tight. i did notice however the ends of the axels where they meet looked like they had been touching... they looked a bit scored.

that washer i was talking about would have been sitting flush in between the two axels.

I think in the normal diff the axles probably run against each other and now the washer has increased the load on the axle ends.
I think I would lose the washer.