oh no, is this 8.75 housing too bad?

I shipped a housing to Moser once for narrowing and straightening. Came back and I have put over 100,000 miles on it. No issues. And it wasnt all that pricey. The waiting was the hard part. That and the border crossing.
Have you considered popping the cover off the little 7.25 to see whats going on in there? Maybe a tooth chip in there, just floating around looking to make trouble?
Or a rental car?
Dont forget the brake backing plates will add some install space.But yeah, not enough if youre 1/2 inch short.
And the axles plus center spacer have a minimum axle flange to flange dimension that dictates the housing flange to flange distance with backing plates on.