To those whom have read my pasted posts over the last couple years, my apologies. (my little tin drum) It's just that mine were seemingly among the worst of the Corporate 20 hassles;
I purchased my '78 CJ 5 a couple of years ago (January '05) and had been having some rear axle problems. Shortly after acquiring this CJ axle lube was seeping out of the hub. Upon removing the axles we noticed that the inner wheel bearings were WELDED to the one piece axle, not by heat/friction, but by someone with a welder! A local shop re kitted this axle (narrow AMC 20) with a Yukon 1 piece axle kit. 1st try and the bearing free play was too tight - burned up the wheel bearings. 2nd try, too loose - axle backed out of the housing shortly after leaving shop. 3rd try and things went well for about two months and then noticed some seepage at the rear hub again. Sure enough, the free play had increased. This go, a non stock bearing keeper was installed to hold bearing firmly in place -we hoped! The shop chief noticed that there were two half circle ( ) inserts incorporated into this axle (This may have been what had made the marks in your axle tubes) that were part of the 'welded' axle, no mention of these in the AMC service manual that I luckily had acquired since getting this Jeep, and another odd thing is correct free play couldn't be obtained without these half circle inserts. We contacted Randy's Ring and Pinion and learned that a spacer
was missing for the kit we had purchased from them earlier. We had to pull the dang thing apart AGAIN and with Randy's on the phone for guidance we set the bearing clearance at the long side of tolerance, 0.62
One week later I smelled that old 'hot bearing' odor I had become so familiar with.
pulled the axles again and saw the damn roller bearings formed a 'conga line'. So I made a trip out to Mac's Jeep Parts and we pulled a Dana 44 out of an old Jeep Scrambler, installed a Lock Right differential and new bearings throughout and I've not had any issues since (knock on wood). After turning in the AMC 20 for core we noticed that the troubles lied in that the axle tubes had become or had always been (from reading other accounts on the web) crooked from the differential~!
I sure hope yours is an easier path!