I didn't say an 8 3/4" wont handle 500 HP. I
said at 500 HP, you are on the verge, depending on driving style, engine torque and vehicle weight.
I gave the example of fuel dragsters in the '60s and '70s successfully running 8 3/4" rearends, verses my friend's (heavy/torquey/450 hp/4-speed) street car breaking 8 3/4" axles/gears/power-locks on the strip.
I also priced 3 options:
1. New, nodular iron 489 case with forged steel caps, billet adjusters, 3.91 US/Strange gears, repro power-lock (4 pinion clutch) sure-grip, crush sleeve eliminator and forged steel 7290 or 1350 U-bolt yoke $1175
2. New, nodular iron 489 case with forged steel caps, billet adjusters, 3.91 US/Strange gears, Eaton True-Trac (worm gear) differential, crush sleeve eliminator and forged steel 7290 or 1350 U-bolt yoke $1375
3. New, bolt-in S-60 Dana 60 assembly built with 35 spline axles, Track-Lock (2 pinion clutch) sure-grip and 1350 yoke $1875
4. New, bolt-in S-60 Dana 60 assembly built with 35 spline axles, S-Track (worm gear) differential and 1350 yoke $2175
BTW, a new 35 spline S-60 and a new, COMPARABLE 9" rearend weigh within 10 lbs of each other. The 9" rear costs more, creates more friction and robs more HP, though.