Well we pulled the broken rear apart and found out what happened, seems we chipped a tooth (really) ..and the broken part got trapped under the edge of the pinion gear and overheated it bad enough to melt the nylon locking material in the main pinion nut.  This heat of course blew all the seals and allowed most of the lub oil to leak all over the exhaust system. Making that great death smell that comes free with the killing of a differential.

ABOVE: Anyone know what temperature would cause the nylon to melt. The shaft was a very nice ‘blue’ color ..

ABOVE: Another view of the missing tooth and the burnt bearing.  The locker unit is now a limited slip ..more slip than limited.