My immediate reasction is design feature, unles you know that its got
worse over time.  Mine isn't the best example as it has a 7.5 ins diif
as opposed to the more normal 7 inch and also is not trimmed so there
is only a thin piece of stainless between me and the diff!!.  There is
a lot of dif noise and clunking, which I have always believed is due
to the fact that the rubber coupling is removed and therefore any
drive differences between gearbox and driveshafts manifests as
clunking due to taking up the backlash. I am not sure what the
backlash tolerance is; certainly it isn't insignificant, but is pretty
easy to measure if you have a dial gauge.  I have had two diffs and
both behaved similarly.  I too have noise on overrun, but am pretty
sure mine is the gearbox, which does need to come out for a
recondition, bvut this will be a job for its next winter hibernation.
Before spending £500, which seems hellish high to me, I would hitch a
ride in another Xtreme and compare notes.

There is another potential source of noise caused by the rear hubs not
being machined to sufficient a diameter to clear the alum ABS ring on
driveshafts fitted from Sierras that had ABS.  The solution on mine
was simply to machine away the teeth to get clearance.

Nigel

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