Boy, I just read this whole thread in one sitting. Alot of lunch there.
I will attempt to sumerize, I'm sure I missed a lot, so it would be nice if some one explained the important points I missed. I'm not someone who takes t-cases apart every day. If I had to do it for a living, I would have starved a long time ago. But I did put my own Orion together and install it. Of coarse I had to take it apart and do it again several times before I felt I got the insides together right. And I finally called Mudrack and realized I had an ordering problem with the thrust washers. I finally got the strain gage reading right on rotating the output shaft with the expected number of shims. I don't think any of the gears could move around. When I changed my fluid, I had a lot of fine stuff on the drain plug magnet, but nothing a large as a flake, and the oil did not look metalic. I have not had a problems yet with it popping out of any gears. But it does seem to weep fluid from every gasket, but my e-brake is still dry (for the first time in 20 years thanks to Mudrack's double seal). I probably have close to 1000 miles on it by now (short commuter miles). I will have to take off the inspection panels and take a look inside, did not know there were so many problems with this case. Good thing I bought a 5 gal tub of Torco MTF up front.
So anyways, if I followed the thread...
You changed your oil and saw a lot of dust on the magnet, and metalic looking fluid. You discovered this was due to a missing spacer on the tranny output shaft, which allowed the gear on the shaft to walk towards the tranny and wear into the t-case housing. This problem is more prevelent or only effects those with chevy trannies? Mine is mounted to an H41, and I seem to remember two spacers on the output shaft, one is the space for the optional PTO gear. I think the gears only lined up if I got the order of the spacers right. Leaking oil from the gaskets and speedo is common, I'm guessing I should just use some permatex, I used new stock gaskets dry. And the problem with popping out of gear is caused by re-using some of the old parts that were worn too much?
gary