I believe you axles are too short. The standard A-body axle is 27 11/16". It has to be longer with the backing plate/drum change if you went to big bolt pattern.
The housing is wider than a std a body by a little bit and the axles are shorter than need be.
My guess at what's happening. The powerlock likely has a split side gear set up. When the axles are installed, you get full engagement on the outer set and minimal, where the axle is torn up, on your inner set. I'll go one further that the two gearsets are not lined up now, so the axle can't drop all the way in.
With a 52 13/16 housing, the outer drum to drum with LBP will be over 58". The axles need to be ~28 3/16".
The center gap on a 8.75 rear is ~1.5" So if you add the two axle length and 1.75, that comes up short on your required overall width. The 27.875 axle are right for an overall width of ~57.5"
Like Tracy mentions, easiest fix is one piece side gears and some file time cleaning up the splines.
