[Mike Peters]

Update: I ground the inside tab off a pinion thrust washer and shimmed the rear pinion bearing with it. It's pretty thick. Reassembled the axle housing. Backlash disappeared, but it binds a little bit in one spot when I rotate the driveshaft around the entire ring gear. So now hunting for a thinner shim. Dave is correct in saying that the pinion gear is cone shaped, so shimming the pinion to the rear DOES reduce back lash between the ring and pinion. A larger question is: Is this the best way to adjust backlash? Tom Endy may still be correct in adjusting backlash strictly with banjo gaskets and carrier shims. It can be done either way, but Tom's method keeps the pinion centered on the ring gear. I will defer to the experts on this question.