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Need help with dana 35 rear axle


The situation you described is impossible. The C-clip does not touch the pinion shaft , the ends of the axles "touch" the pinion The position of pinion will not affect this in any way.
That’s not the pinion shaft. It’s the cross pin. The ends of the axle shafts contacting the cross pin is what prevents them from moving far enough for the c-clip to fall out.
 

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