Looks like the pinion nut came loose or off. Either that or the pinion bearings got destroyed in a hurry! The 3.23's will give you a bit more mileage and lower engine RPM at a given speed and a little less acceleration off the line. A good gear for general driving. The axle shaft end play is just the amount of movement that the shaft will have pushing in and pulling out on the flange. Use a dial indicator to measure how much it has. The book say .008-.018 but I don't like anything over .012. I've seen them leak at looser specs. Make sure you do the measuring with both sides off the ground and brake drums off as well.
