[psogden]

Again, appreciate all the comments from you all. 3 more better pictures attached after further cleaning axle. I do have one of those Blue Point "thread fixer" tools which works like cutting a nut in half, etc. Will use it on the axle. Think John has it right in suggesting the "give it another try" approach & if it doesn't hold--time for a replacement axle (we all know how easy that job is).
I keep wondering about the wisdom of the deceased and long time V-8 Club adviser, Dick Flynn, who wrote many articles on all aspects of V-8s and obviously worked on countless cars, doing everything there is to do on them. His advice on torquing axles (knowing the official Ford guidelines of 200 foot-pounds) was to torque to 150-160 FPs. He claims never to have had a failure doing this.