8.75 diff - metal in oil (pictures). Is it ruined?

That is the Green style bearings. I thought you may have been using the stock taper bearing without the use of a thrust block on the cross shaft in the sure grip. But no your good. The picture in post 72 I thought was of the axle housing end. I realize now it was of the center where the third member goes in. That grind mark is normal and in all 8 3/4 housings for ring gear clearance. I'm still baffled as to where all the metal came from?