I'd like to officially thank Dick @reddingcruiser for helping me today over the phone, I could not have completed this task without his vast knowledge of diffs and his willingness to assist me.
Removed the pinion shaft and spacer
The pinion shaft spacer appears to be worn since there was a big enough gap between it and the thrust washer for a flat head screw driver to be inserted.
then removed top gear and thrust washer
removed bottom gear and thrust washer. The thrust washer look pretty worn out and need replacing.The spider gears all appear to be in good condition.
removed top gear and thrust washer
removed 'C' clip and left side gear
removed 'C' clip and right side gear
The ring gear has a lot of rotational play, where as the pinion gear is solid with no lateral, vertical or longitudinal play, so I think we're good there. From the looks of things the PO had the diff serviced at some point in time, however, the tolerances were not set properly in accordance with the FSM specifications.
propped up the third member
I removed all bolts and washers, unfortunately I was not able to free the 3rd member from the axle, used some force with a mallet, screw driver, pry bar to no avail.
Do you guys have suggestions on how to separate these two units?