The fact that your moving the pinion bolt laterally tells me that you broke the rust. Can you now turn it with a wrench moving back and forth? Seems like you can salvage the pinion bolt and gear if you can get them moving at all. Use lots of penetrating oil. I have already torched them out and put new in. When you put in new you heat the pinion gear to almost cherry red and slip it over the pinion bolt. Ya, get it in the correct position fast.
Like Matthies said, clean your axle, I also suggest you clean up your wedges good. What are you setting the tires for, maybe 30" rows? If so I have a huge watch out for you. Let me know.
Going back together I have been experimenting with small amounts of never seize on both the axle and wedges. The key word is small amounts. I try to not let the never seize cover the entire surfaces. I just want it to help a little next time. And then retorque the wedge bolts a couple times once you start using it.
Make sure you carefully inspect both your wedge bolts and your push bolts. I sometimes find them to be bent and quite often the threads are really stretched. Match new threads to the old threads. If you see a lot of daylight they are stretched. I like to put in good bolts to make sure I am not damaging the casting threads with damaged bolts. Also, clean out the casting threads. All of this will help things go back together nicely and it will work better next time. I am careful to put a very small amount of never seize on the wedge bolts.
Make sure the push bolts have the retaining clips on the back side, or you will loose them. Never seize the push bolts.
Again regarding the pinion bolt and gear, once together I oil well and then make sure I put the cork in to keep the dirt and water out. I think it is a 1" cork at Ace.
There is a tool available to loosen the wedges. If you continue have issues with the other wheel let me know. I'll get you the contact information.
I always like to make sure the snap ring is installed at the end of the axle just for safety.
Just my two cents. As you can see I like to bring these back to great working condition.
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