8.75 SureGrip , Is this Normal?

Yeah, I agree that something is not right. No diff should ever require a bar to turn the pinion! So it has to come out. And since it "peg-legs" it's either not a well-functioning Chrysler SureGrip, not a SureGrip at all, or an RPM-sensitive "posi" or a screw-gear type of aftermarket LimitedSlip.
I have never seen an RPM-sensitive "posi", that is a GM thing. .
And the Screw-gear types are very rare and expensive.
I have also never seen a Chrysler-type suregrip pegleg on jackstands, but I suppose a binding pinion could do that. So your unit has at least two problems,neither of which can be addressed until it is on the bench. Sorry :(