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This cannot be if it's a full floater. The shaft is just connected to the stub and inserted in the diff.
All there is is an oil seal that contacts the shaft inside the housing, so if it's out of the diff it should move without any resistance. There is something fishy here.
Are you sure it's a full floater and not a semi-floater?
If you look at the rear of the diffhousing, are there bolts visible, IOW is the rear of the housing bolted to the housing itself?
Unfortunately I can't get the axle out enough to get much behind it. This is the best I've come up with and it's not enough. I've got all my weight leaned on to jack, and I'm expecting the bolts threaded into the axle flange to fail. I guess if they do, I could tap out something larger and keep going...
Can the axle be rotated easily?
Am I missing something in this picture?? Where is the end of the axle shaft (the flat part that bolts to the hub with cone washers)?
The oil seal is nothing but a piece of rubber. Even if it was melted/welded to the shaft you would break it with one hand.
If you're talking about a messy situation in the hub, this can be but as there are NO bearings sitting on the shaft (If it is a full-floater), you must be talking about the wheel bearings. If they are a mess then there is much more going on, but that's evident as you said you blew a bearing.
But this still should not keep you from just sliding out the shaft.
There are some threads on here with stories of front wheel bearings being so bad that they severely damaged the front spindle. Its possible that the rear bearings could do the same if they froze up and started to melt the spindle.
Now that the shaft is several inches out I would take out the other shaft and remove the third member to look inside the housing, trying to find out more. As the stubborn shaft is out that far, removing the diff should be no problem.
Finally an update...
Anyone in Calgary have a full rear for sale?