Tore apart my rearend in my 16 today with the help of a friend.
Found that the surface that the drive shaft bearing is supposed to be riding on was loose and the only thing holding it was the key for the pinion gear, in turn the key was worn badly and the pinion gear had 1/4 in play. Not good.
There where babbit washers as well, they were in good shape. Will like having them for show.
Sounds like you opened it just in time.
Andrew,
Please post photos when you get a chance.
Neil