8 3/4" sure-grip swap and rebuild questions

Well I'm sad to report it still whines. At lower speeds (under about 40) it whines on coast, at higher speeds it whines lightly on acceleration. I drove it about 10 miles and the sound stayed the same. I put it back together with .007" backlash and the pattern still looked like the last pic I posted. What gives? What will happen if I just keep driving it and ignore the noise? I did touch the rear end housing in the center after driving and it was pretty warm.

If the pinion depth needs to be readjusted I'm going to take the 3rd member to a shop, this project killed me. I might be able to readjust backlash but that's as much as I'm willing to do at this point.
It has too much pinion gear depth. You need to back it out a little.

Also, FWIW, I don't use a gasket on 3rd member style rear axles. RTV only. It's always worked well for me.