So does a broken C-clip require a rebuild? I've never looked into it before. I know gdstock said to stop driving it and I agree with him but I can't. This is my only means of transportation to and from work everyday. I hate to say it but I've put a few thousand miles on it since the grinding noise started, which was exactly the time I had the suspension lift put on it.

Elevated 81, I do have a floor shifter but I havent tried checking if it moves a bit while accelerating heavy. I'll try that as well.

Thanks again for all the help so far guys. There's no way I'd be able to figure all this out myself and then I'd probably bring it to a shop and get ripped off.

 

I don't know if it requires a rebuild for the clip, but if the R&P is damaged, then yes. Otehr parts may be damage as well. Gotta pull the cover and visually inspect and see what may be bad. And a the very least, replace that clip before something gets worse.

I undersatnd the DD, but it it locks up on you, then you cannot drive and cost of repair goes way up!

 

The picture I provided you shows the effects of the broken c-clip and what it's function is. At some point, you won't have LSD. At some point, the remainder of the c-clips drop down like you found or may get churned into the carrier. My indication was clicking rather than grinding. You've already opened up the diff and found the piece(s). You can by all mean drive it, but its not recommended.

If the clutch plates are scraped off, then it is optional to replace it. Not rebuildable. Or maybe you can just yank it out and make it an open carrier, but an install kit is possibly still needed.

Find the FSM and the Parts pdf files up in the FAQ/DIY section, unless gdstock provides it for you.

I had the stealership replace mine...and cost was >$500 I can't remember.

Since you've had the diff cover off, I'd put the axle on jack stands and view the ring gear for any probs. Hopefully you can see the pinion too.