I'm pretty sure the C-clip came out of the axle. It should be an 8.8 and they are kind of known for that. Don't know why, but the stupid things seem to develop a lot more end play than they should, then when you abuse them, they tend to come out in pieces.
I too saw the rooster tails from the rear tires on the sand dunes, so broken splines aren't likely, unless they were just at the right angle that the tires threw the sand to look like rooster tails.
I was kind of shocked that the drag race was such a stomping with the bronco winning. I've always thought that the TBI chevy's felt just as strong as the 351's ever did. Unless it was a TBI 305, then that would make sense.
I'm also thinking that they had to stop for fuel somewhere, I can't imagine all 3 rigs making it 400 miles on one tank, especially not the way they were driving.