You've gone this far -- replace the seal. I'd get the yoke as smooth as possible -- if you need coarser sandpaper, fine, but use finer paper to finish it.
Did you by any chance mark the pinion nut and pinion? That's what I do, and then tighten it very slightly tighter than it was before I took it apart. You can't measure turning torque of the pinion with the differential together -- there's way too much drag from the axles and differential. If you overtighten the nut the pinion bearings will go out in a very short time.
Check the housing seal bore to make sure it isn't damaged, and put a little sealer on the O.D. of the seal. I also put a small amount of sealer between the pinion flange and nut, and on the threads -- it keeps oil from wicking out around the pinion threads and the nut.
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Lee Peterson
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"I didn't expect a kind of Spanish Inquisition...!"
'69 Cameo White RA III Judge, 4 speed, owned since 1977 -- my first car.
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