Hi Jim, sounds like you are looking at the outer bull pinion shaft bearing the diff. bearing is farther in. I would replace both the bearing and the race. I bet it is on the diff lock side, they always go bad. If you have an IT manual it will tell you how to set the bearing preload. If you don't have a manual I would buy one they are about $30 bucks and they are well worth the money. I did a 1066 last month both sides and it was no big deal. be sure to set that preload (endplay) and I always reseal the brake pistons and replace the outer oring on the housing. Also you are right you can't pull that shaft out without removing the inner bearing it willnot clear the bull gear Good luck Ed
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