Yes, since I bought these gears used I think that's the problem.
The guy I bought them off switched out these gears for 4.56's so that might be a clue that he had a 4.56 carrier. I had no idea at the time there were different size carriers for the Dana 60. Live and learn.
The .160 spacer should give me the adjustment I need, if not the 3.54's are going back in and I'll be selling the 4.10's to someone that can use them and buying the right ones for my carrier.
I'll find out next week.
I'm curious, do the spools for a Dana 60 come in different series and do they make a spool for the stock 23 spline axles?