What would be the problems trying to use a proper sized snapring instead of the C clip in the differential? It's been a few years since I messed with one.

 

For the axle shaft ? I'm not aware of any snap ring that is as thick as the c-clip. It would require enormous force to spread open. A regular snap ring would allow the axle shaft to move too much.

 

Yeah I think DerTruck has a great point. You'd need some uber-duty snap ring pliers, assuming you could find a ring thick enough.

Plus that clip sees some considerable thrust loads, so it needs to be pretty thick.

The solution would be a machined 2-piece collar with feature to fit the groove, then the clamshell is held together with a snap ring. This is what Sonnax does for the t-case output fix.

You might also get away with a round/wire snap ring that has a sleeve slip over it so it absolutely cannot spread open. This is how Bilstein does nearly all their shocks and struts. The entire weight of a vehicle corner is on a little ring in a little groove, but that ring is held captive by exterior sleeve